Revenue Beat: SilverCrest Metals Inc. Exceeded Revenue Forecasts By 23% And Analysts Are Updating Their Estimates
Investors in SilverCrest Metals Inc. (TSE:SIL) had a good week, as its shares rose 8.1% to close at CA$6.65 following the release of its second-quarter results. Revenue of US$63m beat expectations by an impressive 23%, while statutory earnings per share (EPS) were US$0.16, in line with estimates. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Check out our latest analysis for SilverCrest Metals
After the latest results, the five analysts covering SilverCrest Metals are now predicting revenues of US$226.1m in 2023. If met, this would reflect a huge 38% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to step up 13% to US$0.62. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$219.4m and earnings per share (EPS) of US$0.59 in 2023. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.
Despite these upgrades,the analysts have not made any major changes to their price target of CA$9.00, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values SilverCrest Metals at CA$10.25 per share, while the most bearish prices it at CA$7.50. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The period to the end of 2023 brings more of the same, according to the analysts, with revenue forecast to display 91% growth on an annualised basis. That is in line with its 102% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 14% annually. So although SilverCrest Metals is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards SilverCrest Metals following these results. Happily, they also upgraded their revenue estimates, and are forecasting them 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.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple SilverCrest Metals analysts - going out to 2025, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with SilverCrest Metals , and understanding this should be part of your investment process.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
