Why Is Royal Gold (RGLD) Down 11.6% Since Last Earnings Report?
It has been about a month since the last earnings report for Royal Gold (RGLD). Shares have lost about 11.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Royal Gold due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Royal Gold Earnings Surpass Estimates in Q1, Dip Y/Y
Royal Gold reported adjusted earnings per share (EPS) of 96 cents in first-quarter 2023, beating the Zacks Consensus Estimate of 94 cents. The bottom line, however, declined 3% year over year.
Including one-time items, the company reported EPS of 97 cents compared with the prior-year quarter’s $1.00.
The company generated revenues of $170 million, reflecting year-over-year growth of 4.9%. The upbeat performance can be attributed to higher gold and copper sales at Mount Milligan, a rise in silver sales at Khoemacau, increased gold production at Cortez and contribution from the newly-acquired royalties.
However, these factors were partly offset by lower gold sales at Andacollo, and lower gold and silver production at Peñasquito.
Stream revenues were $115 million and royalty revenues were $55.4 million in the March-end quarter. On a year-over-year basis, stream revenues improved 9.2%, whereas royalty revenues decreased 3%.
The company’s cost of sales came in at $25 million in the first quarter compared with the prior-year quarter’s $23 million.
General and administrative expenses amounted to $11 million, up 22% year over year. The adjusted EBITDA was $135 million in the reported quarter, up 3.8% year over year. The adjusted EBITDA margin came in at 79% compared with the prior-year quarter’s 80%.
Financial Position
Net cash from operating activities was $109 million in the first quarter compared with the prior-year quarter’s $101 million. Royal Gold ended the quarter with cash and cash equivalents of around $127 million compared with $184 million at the end of Mar 31, 2022.
Outlook
The company projects stream segment sales of 320,000-345,000 GEOs for 2023.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, Royal Gold has a subpar Growth Score of D, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Royal Gold has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Royal Gold, Inc. (RGLD) : Free Stock Analysis Report
