Earnings Miss: Allied Gold Corporation Missed EPS By 73% And Analysts Are Revising Their Forecasts

It's shaping up to be a tough period for Allied Gold Corporation (TSE:AAUC), which a week ago released some disappointing quarterly results that could have a notable impact on how the market views the stock. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at US$346m, statutory earnings missed forecasts by an incredible 73%, coming in at just US$0.04 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

We've discovered 1 warning sign about Allied Gold. View them for free.

Taking into account the latest results, the most recent consensus for Allied Gold from six analysts is for revenues of US$1.23b in 2025. If met, it would imply a sizeable 37% increase on its revenue over the past 12 months. Allied Gold is also expected to turn profitable, with statutory earnings of US$0.68 per share. In the lead-up to this report, the analysts had been modelling revenues of US$1.24b and earnings per share (EPS) of US$0.73 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

View our latest analysis for Allied Gold

The consensus price target held steady at CA$8.62, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Allied Gold at CA$12.07 per share, while the most bearish prices it at CA$5.81. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Allied Gold's growth to accelerate, with the forecast 51% annualised growth to the end of 2025 ranking favourably alongside historical growth of 33% per annum over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 13% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Allied Gold is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Allied Gold analysts - going out to 2027, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 1 warning sign for Allied Gold you should be aware of.

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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.