Royal Gold (RGLD) Down 4.9% Since Last Earnings Report: Can It Rebound?

A month has gone by since the last earnings report for Royal Gold (RGLD). Shares have lost about 4.9% 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 its most recent earnings report in order to get a better handle on the important drivers.

Royal Gold Earnings & Revenues Beat Estimates in Q1

Royal Gold reported adjusted earnings per share of $1.07 in first-quarter fiscal 2022 beating the Zacks Consensus Estimate of 97 cents. The bottom line increased 30.5%, year over year, aided by record revenues and strong operating performance.

Including one-time items, the company reported earnings per share of $1.07 compared with the prior-year quarter’s $1.63.

The company generated record revenues of $174 million, reflecting year-over-year growth of 19%. The top-line figure surpassed the Zacks Consensus Estimate of $166 million.

Stream revenues were $115.9 million and royalty revenues were $58.5 million during the reported quarter. Higher gold sales at Mount Milligan, higher gold production at Cortez, gold sales from the newly-acquired NX Gold Stream and an increase in average copper prices contributed to the top-line performance during the quarter. These were partly offset by lower gold sales from Andacollo and decrease in average gold prices compared to the prior period.

The company’s cost of sales came in at $27 million in the fiscal first quarter, up from the prior-year quarter’s $22 million.

General and administrative expenses amounted to $7 million, down 4.4% year on year. The adjusted EBITDA was $139 million in the reported quarter, up 19% year over year. The adjusted EBITDA margin came in at 79.8%, flat year over year.

Financial Position

Net cash from operating activities was $129.9 million in the fiscal first quarter compared with the prior-year quarter’s $94 million. Royal Gold had cash and cash equivalents of $160 million during the fiscal first quarter compared with $226 million at the end of fiscal 2021.

Outlook

For the period ended Dec 31, 2021, Royal Gold now expects stream segment and royalty sales volume to range between 180,000 and 190,000 Gold equivalent ounces (GEOs). Depreciation, depletion and amortization expense is estimated to be $525-$575 per GEO.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision flatlined during the past month.

VGM Scores

Currently, Royal Gold has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

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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