How Do Analysts See Argonaut Gold Inc. (TSE:AR) Performing In The Year Ahead?

After Argonaut Gold Inc.’s (TSE:AR) earnings announcement in September 2018, analyst consensus outlook appear vastly optimistic, as a 64% rise in profits is expected in the upcoming year, relative to the previous 5-year average growth rate of 4.9%. Presently, with latest-twelve-month earnings at US$24m, we should see this growing to US$39m by 2020. Below is a brief commentary around Argonaut Gold’s earnings outlook going forward, which may give you a sense of market sentiment for the company. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.

View our latest analysis for Argonaut Gold

Can we expect Argonaut Gold to keep growing?

Longer term expectations from the 3 analysts covering AR’s stock is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To understand the overall trajectory of AR’s earnings growth over these next fews years, I’ve fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.

TSX:AR Future Profit January 2nd 19
TSX:AR Future Profit January 2nd 19

This results in an annual growth rate of 0.1% based on the most recent earnings level of US$24m to the final forecast of US$41m by 2022. EPS reaches $0.14 in the final year of forecast compared to the current $0.14 EPS today. In 2022, AR’s profit margin will have expanded from 15% to 17%.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For Argonaut Gold, I’ve compiled three essential aspects you should look at:

  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
  2. Valuation: What is Argonaut Gold worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether Argonaut Gold is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Argonaut Gold? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.