Gran Colombia Gold Corp. (TSE:GCM) Just Reported Third-Quarter Earnings And Analysts Are Lifting Their Estimates

By
Simply Wall St
Published
November 15, 2020

Last week, you might have seen that Gran Colombia Gold Corp. (TSE:GCM) released its quarterly result to the market. The early response was not positive, with shares down 6.7% to CA$6.11 in the past week. Overall the results were a little better than the analysts were expecting, with revenues beating forecasts by 4.8%to hit US$113m. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Gran Colombia Gold

TSX:GCM Earnings and Revenue Growth November 15th 2020

Taking into account the latest results, the consensus forecast from Gran Colombia Gold's twin analysts is for revenues of US$440.1m in 2021, which would reflect a sizeable 21% improvement in sales compared to the last 12 months. Earnings are expected to improve, with Gran Colombia Gold forecast to report a statutory profit of US$1.61 per share. Before this earnings report, the analysts had been forecasting revenues of US$406.8m and earnings per share (EPS) of US$1.52 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.

With these upgrades, we're not surprised to see that the analysts have lifted their price target 11% to US$9.31per share.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. Next year brings more of the same, according to the analysts, with revenue forecast to grow 21%, in line with its 20% annual growth over the past five years. Compare this with the wider industry, which analyst estimates (in aggregate) suggest will see revenues grow 6.6% next year. So it's pretty clear that Gran Colombia Gold 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 Gran Colombia Gold's earnings potential next year. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2023, which can be seen for free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 3 warning signs for Gran Colombia Gold 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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