Assessing Ramelius Resources (ASX:RMS) Valuation After Its A$250 Million Share Buyback Announcement

Ramelius Resources (ASX:RMS) has put a sizeable vote of confidence behind its own stock, approving a A$250 million share buyback that could retire about 4% of its share base over the next two years.

See our latest analysis for Ramelius Resources.

The buyback lands on top of an already strong run, with the share price up 80.57% year to date and a hefty 317.76% three year total shareholder return, suggesting momentum is still very much on Ramelius’s side.

If Ramelius’s surge has you thinking about where capital could work hardest next, it might be worth exploring fast growing stocks with high insider ownership as a hunting ground for the market’s next compounders.

With earnings rising, a near 20% gap to analyst targets and a hefty intrinsic discount, is Ramelius still flying under the radar, or is the buyback a sign that the market has already priced in its future growth?

Most Popular Narrative: 12% Undervalued

With Ramelius Resources closing at A$3.81 against a narrative fair value of A$4.33, the latest consensus frames the stock as modestly discounted, built on upgraded growth and margin assumptions rather than blue sky hopes.

The consensus analyst price target has risen slightly from A$4.31 to A$4.33.

Revenue growth forecasts have strengthened, up from 12.9% to 13.4%, while net profit margin estimates have improved from 35.6% to 36.4%.

Read the complete narrative.

Want to see what is hiding behind those higher margin forecasts and richer growth assumptions, including the earnings multiple this story leans on, and how long analysts think that mix can last? Dive in to see the full set of projections driving that fair value call.

Result: Fair Value of $4.33 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, sustained high gold prices, or smoother than expected integration of recent acquisitions, could keep margins resilient and challenge assumptions of a moderation in earnings.

Find out about the key risks to this Ramelius Resources narrative.

Build Your Own Ramelius Resources Narrative

If you would rather stress test the numbers yourself or challenge the current storyline, you can build a complete view in just a few minutes: Do it your way.

A great starting point for your Ramelius Resources research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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