Earnings Update: Altius Minerals Corporation (TSE:ALS) Just Reported And Analysts Are Boosting Their Estimates

Shareholders of Altius Minerals Corporation (TSE:ALS) will be pleased this week, given that the stock price is up 16% to CA$16.73 following its latest annual results. It was a respectable set of results; while revenues of CA$60m were in line with analyst predictions, statutory losses were 19% smaller than expected, with Altius Minerals losing CA$0.65 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Altius Minerals

Taking into account the latest results, the current consensus from Altius Minerals' three analysts is for revenues of CA$75.7m in 2021, which would reflect a substantial 26% increase on its sales over the past 12 months. Earnings are expected to improve, with Altius Minerals forecast to report a statutory profit of CA$0.48 per share. In the lead-up to this report, the analysts had been modelling revenues of CA$70.8m and earnings per share (EPS) of CA$0.44 in 2021. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.

Despite these upgrades,the analysts have not made any major changes to their price target of CA$18.00, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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. The most optimistic Altius Minerals analyst has a price target of CA$20.00 per share, while the most pessimistic values it at CA$16.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Altius Minerals is an easy business to forecast or the the analysts are all using similar assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Altius Minerals' past performance and to peers in the same industry. We can infer from the latest estimates that forecasts expect a continuation of Altius Minerals'historical trends, as the 26% annualised revenue growth to the end of 2021 is roughly in line with the 28% annual revenue growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 6.3% annually. So it's pretty clear that Altius Minerals is forecast to grow substantially faster than its industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Altius Minerals' earnings potential next year. Happily, they also upgraded their revenue estimates, and are forecasting revenues 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Altius Minerals going out to 2025, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for Altius Minerals that you should be aware of.

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This article by Simply Wall St is general in nature. 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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