Yahoo Finance Analysts Have Just Cut Their Argonaut Gold Inc. (TSE:AR) Revenue Estimates By 8.3%
Today is shaping up negative for Argonaut Gold Inc. (TSE:AR) shareholders, with the analysts delivering a substantial negative revision to next year's forecasts. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.
Following the downgrade, the current consensus from Argonaut Gold's three analysts is for revenues of US$496m in 2023 which - if met - would reflect a huge 26% increase on its sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of US$541m in 2023. The forecasts seem less optimistic overall, with the modest decline in revenue estimates in the latest consensus update.
Check out our latest analysis for Argonaut Gold
There was no particular change to the consensus price target of US$0.89, with Argonaut Gold's latest outlook seemingly not enough to result in a change of valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Argonaut Gold analyst has a price target of US$2.61 per share, while the most pessimistic values it at US$0.35. We would probably assign less value to the forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. With this in mind, we wouldn't rely too heavily on the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
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 20% growth on an annualised basis. That is in line with its 23% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 11% per year. So it's pretty clear that Argonaut Gold is forecast to grow substantially faster than its industry.
The Bottom Line
The most important thing to take away is that analysts cut their revenue estimates for next year. They're also forecasting more rapid revenue growth than the wider market. Overall, given the drastic downgrade to next year's forecasts, we'd be feeling a little more wary of Argonaut Gold going forwards.
Need some more information? We have estimates for Argonaut Gold from its three analysts out until 2024, and you can see them free on our platform here.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
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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.
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