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Is This Cheap Gold Stock a Buy After Earnings?
Gold (GCM24) has been rising to new highs, thanks to heavy central bank buying and its status as a “safe haven” investment amid sticky inflation and rising geopolitical tensions. And despite the precious metal's breakout gains already in 2024, analysts at Goldman Sachs (GS) and Bank of America (BAC), to name a few, are calling for gold prices to climb even higher.
For investors looking to add exposure to gold without breaking the bank, here's a closer look at one low-priced gold stock that just reported earnings.
About Gold Royalty Stock
Gold Royalty Corp. (GROY) is a precious metals royalty company that provides financing solutions to mining and metals companies. They acquire royalties, streams, and interest at different stages of a mine's life to build a portfolio offering short, medium, and long-term returns to its investors.
As a royalty company, GROY does not incur any of the operating cost or exploration and labor risks that are typically associated with mining stocks. The company began operations in 2020, with its headquarters in Vancouver, Canada.
Sporting a small market cap of $288 million, Gold Royalty stock is priced under $2 per share. The stock has spiked 34% on a YTD basis, outperforming gold's own returns.
GROY Reports Q1 Earnings
On May 14, Gold Royalty reported its Q1 results, featuring record revenue of $2.9 million - up 476.6% year over year. Land agreements proceeds and interests more than doubled to $4.2 million, while the company managed to trim its operating expenses from $2.5 million in Q1 2023 to $2.3 million in the recently concluded quarter. While revenue missed Wall Street's mark, the quarterly loss per share of $0.01 edged past estimates.
Additionally, GROY notched its first quarter of positive cash flows from operations, totaling $336,000. The company expects to be operating cash flow positive on a full-year basis in 2024, as well.
Management backed its 2024 outlook, saying it's on track to reach its target of 5,000 to 5,600 gold equivalent ounces (GEOs), translating to $10.0 million to $11.2 million in total revenue, land agreements proceeds and interest with gold at $2,000 per ounce. At the midpoint, that would represent a 100% year over year increase in GEOs.
What Do Analysts Expect for GROY?
Wall Street is expecting GROY to break even on a per-share basis in fiscal year 2024, while revenue is expected to surge to $12.31 million.
With 7 analysts tracking the stock, the consensus opinion is a “Moderate Buy” on Gold Royalty stock. Four have a “Strong Buy” rating, 1 has a “Moderate Buy" rating, and 2 have a “Hold” rating on the gold stock.
The mean price target for GROY is $3.54, indicating an upside potential of 83.4% from current levels.
On the date of publication, Ruchi Gupta did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
