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GROY: Equity Raises And Lock Up Period Will Shape Balanced Outlook

Increased Gold Risk And Costly Royalties Will Undermine Outlook

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GROY
AnalystLowTarget
Not Invested
Published 25 Aug 2025

Update shared on 11 Jan 2026

Fair value Increased 38%
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AnalystLowTarget's Fair Value
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1Y
187.1%
7D
-1.4%

Analysts have raised their price target for Gold Royalty from US$3.25 to US$4.50. They cited updated assumptions, including expectations of higher revenue growth, a stronger profit margin profile and a lower future P/E multiple, as the key factors behind the change.

What's in the News

  • Gold Royalty Corp. completed a follow on equity offering of common shares, raising US$90 million by issuing 22,500,000 shares at US$4 per share, with a US$0.18 discount per share (Key Developments).
  • The company filed a separate follow on equity offering of common shares, indicating ongoing use of equity markets for funding (Key Developments).
  • National Bank Financial, Inc. is no longer a co lead underwriter for Gold Royalty Corp.'s US$70 million follow on equity offering (Key Developments).
  • National Bank of Canada Financial Markets has been added as a co lead underwriter for Gold Royalty Corp.'s US$70 million follow on equity offering (Key Developments).
  • Directors, officers and certain holders of common shares, options, warrants and restricted share units agreed to a lock up period from 11 Dec 2025 to 12 Mar 2026. This covers 197,490,625 common shares and related securities (Key Developments).

Valuation Changes

  • Fair Value: The analyst fair value estimate moved from US$3.25 to US$4.50 per share, representing a sizeable uplift in the target range being used.
  • Discount Rate: The discount rate used in the model shifted from 7.09% to about 7.75%, a modest increase in the required return assumption.
  • Revenue Growth: Forecast revenue growth moved from roughly 53.94% to about 65.06%, indicating a meaningfully higher growth assumption in the updated model.
  • Net Profit Margin: The assumed net profit margin changed from around 31.96% to about 52.39%, pointing to a much stronger profitability profile being built into the estimates.
  • Future P/E: The future P/E multiple moved from about 48.13x to around 30.40x, reflecting a materially lower valuation multiple applied to projected earnings.

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