A month has gone by since the last earnings report for Royal Gold (RGLD). Shares have added about 3.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Royal Gold due for a pullback? 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 Beat, Sales Lag Estimates in Q1
Royal Gold, Inc.’s adjusted earnings per share of 60 cents in first-quarter fiscal 2020 (ended Sep 30, 2019) beat the Zacks Consensus Estimate of 58 cents. The company had reported earnings per share of 23 cents in the prior-year quarter.
Including discrete income tax benefits of 49 cents per share, primarily related to Swiss tax reform, and a loss on changes in fair value of equity securities of 2 cents per share, earnings came in at $1.07 per share in the reported quarter.
The company generated revenues of $118.8 million, up 19% year over year. This can be attributed to increase in stream revenues and higher average gold and silver prices. However, the top line missed the Zacks Consensus Estimate $133 million. Stream revenues came in at $87 million, up from the year-ago quarter’s $70 million, driven by an improvement in gold and copper sales at Mount Milligan, which was partially offset by lower gold sales at Andacollo owing to timing of deliveries.
Operational Highlights
Royal Gold reported volume of 80,700 GEOs (Gold Equivalent Ounces), which declined 2.1% from the year-earlier quarter. Average gold price was up 21% to $1,472 per ounce from the year-ago quarter.
The company reported cost of sales of $20 million in the reported quarter, up from the year-ago quarter’s $17 million. General and administrative expenses declined to $7 million from $10 million reported in the prior-year quarter. Operating profit came in at $48.8 million, up from the $25.3 million reported in the year-ago comparable period.
Financial Position
Net cash provided by operating activities was $71 million in first-quarter fiscal 2020 compared with $45 million in the prior-year quarter. The company ended the quarter with $122 million cash in hand, up from $117 million reported at the end of the prior-year quarter. As of the end of the reported quarter, the company’s total debt was around $165 million, down from $216 million at the end of the prior-year quarter. The company paid out dividends worth $17.4 million during the reported quarter.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
VGM Scores
At this time, Royal Gold has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile 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 trending upward 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.
Royal Gold, Inc. (RGLD): Free Stock Analysis Report
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