Yahoo Finance Royal Gold (RGLD) Down 2.2% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Royal Gold (RGLD). Shares have lost about 2.2% in that time frame, outperforming 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 drivers.
Royal Gold Q4 Earnings Beat Estimates, Revenues Dip Y/Y
Royal Gold, Inc. reported adjusted earnings per share (EPS) of 91 cents in the fourth quarter of 2022, beating the Zacks Consensus Estimate of 83 cents. The bottom line declined 13% year over year due to lower revenues and higher interest expenses.
Including one-time items, the company reported EPS of 86 cents compared with the prior-year quarter’s $1.04.
RGLD generated revenues of $163 million, down 3% year over year. The downside resulted primarily from lower sales at Andacollo, Pueblo Viejo and Peñasquito. However, these factors were partly offset by an increase in gold and copper sales at Mount Milligan, as well as contributions from the recently acquired royalties at Cortez.
Stream revenues were $109 million and royalty revenues were $54 million in the December-end quarter. Both stream and royalty revenues declined year over year from $111 million and $58 million, respectively.
The company’s cost of sales was $25 million in the fourth quarter, flat year over year. General and administrative expenses amounted to $9 million, up 12.5% year over year. The adjusted EBITDA was $128 million in the reported quarter, down 5.2% year over year. The adjusted EBITDA margin came in at 78.5% compared with the prior-year quarter’s 80.4%.
Financial Position
Net cash from operating activities was $101 million in the fourth quarter compared with the prior-year quarter’s $119 million. Royal Gold ended the quarter with cash and cash equivalents of $118.5 million compared with $143.5 million at the end of 2021.
2022 Performance
The company delivered adjusted earnings per share of $3.43 in 2022, beating the Zacks Consensus Estimate of $3.26. The bottom line declined 14% from the 2021 level. Including one-time items, the company reported EPS of $3.63 compared with 2021’s $4.17.
The company generated revenues of $603 million, down 7.8% year over year. However, the top line surpassed the Zacks Consensus Estimate of $583 million.
Stream revenues were $418 million and royalty revenues were $185 million in 2022. Stream and royalty revenues declined year over year from $436 million and $217 million, respectively.
Outlook
The company projects stream segment sales of 54,000-59,000 GEOs for the March-end quarter of 2023.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -10.61% due to these changes.
VGM Scores
At this time, Royal Gold has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. 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 C. 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
