Earnings Miss: Gold Road Resources Limited Missed EPS By 62% And Analysts Are Revising Their Forecasts
It's been a good week for Gold Road Resources Limited (ASX:GOR) shareholders, because the company has just released its latest half-yearly results, and the shares gained 3.9% to AU$1.58. It looks like a pretty bad result, all things considered. Although revenues of AU$135m were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 62% to hit AU$0.026 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Check out our latest analysis for Gold Road Resources
Taking into account the latest results, the most recent consensus for Gold Road Resources from eight analysts is for revenues of AU$311.8m in 2020 which, if met, would be a major 48% increase on its sales over the past 12 months. Per-share earnings are expected to surge 171% to AU$0.11. Before this earnings report, the analysts had been forecasting revenues of AU$312.7m and earnings per share (EPS) of AU$0.11 in 2020. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
There were no changes to revenue or earnings estimates or the price target of AU$1.93, suggesting that the company has met expectations in its recent result. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Gold Road Resources at AU$2.25 per share, while the most bearish prices it at AU$1.30. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Gold Road Resources shareholders.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Gold Road Resources' revenue growth will slow down substantially, with revenues next year expected to grow 48%, compared to a historical growth rate of 66% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 0.1% next year. Even after the forecast slowdown in growth, it seems obvious that Gold Road Resources is also expected to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Gold Road Resources going out to 2023, and you can see them free on our platform here.
You can also see our analysis of Gold Road Resources' Board and CEO remuneration and experience, and whether company insiders have been buying stock.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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