What Does The Future Hold For GoGold Resources Inc. (TSE:GGD)? These Analysts Have Been Cutting Their Estimates

Today is shaping up negative for GoGold Resources Inc. (TSE:GGD) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

After the downgrade, the consensus from GoGold Resources' four analysts is for revenues of US$45m in 2022, which would reflect a chunky 15% decline in sales compared to the last year of performance. Prior to the latest estimates, the analysts were forecasting revenues of US$60m in 2022. The consensus view seems to have become more pessimistic on GoGold Resources, noting the pretty serious reduction to revenue estimates in this update.

Check out our latest analysis for GoGold Resources

There was no particular change to the consensus price target of CA$4.71, with GoGold Resources' latest outlook seemingly not enough to result in a change of valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values GoGold Resources at CA$5.00 per share, while the most bearish prices it at CA$4.40. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting GoGold Resources is an easy business to forecast or the underlying assumptions are obvious.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the GoGold Resources' past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 15% annualised revenue decline to the end of 2022. That is a notable change from historical growth of 28% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 9.0% annually for the foreseeable future. It's pretty clear that GoGold Resources' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for GoGold Resources this year. They're also anticipating slower revenue growth than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of GoGold Resources going forwards.

Need some more information? At least one of GoGold Resources' four analysts has provided estimates out to 2024, which can be seen for free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.