SilverCrest Metals Inc. Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

It's been a mediocre week for SilverCrest Metals Inc. (TSE:SIL) shareholders, with the stock dropping 12% to CA$10.76 in the week since its latest quarterly results. It looks like a pretty bad result, all things considered. Although revenues of US$73m were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 74% to hit US$0.04 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for SilverCrest Metals

Following the latest results, SilverCrest Metals' five analysts are now forecasting revenues of US$283.8m in 2024. This would be a meaningful 8.5% improvement in revenue compared to the last 12 months. Per-share earnings are expected to increase 2.1% to US$0.73. In the lead-up to this report, the analysts had been modelling revenues of US$269.8m and earnings per share (EPS) of US$0.69 in 2024. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.

Despite these upgrades,the analysts have not made any major changes to their price target of CA$13.56, 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. There are some variant perceptions on SilverCrest Metals, with the most bullish analyst valuing it at CA$15.50 and the most bearish at CA$11.50 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting SilverCrest Metals is an easy business to forecast or the the analysts are all using similar assumptions.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that SilverCrest Metals' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 18% growth on an annualised basis. This is compared to a historical growth rate of 85% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 13% annually. Even after the forecast slowdown in growth, it seems obvious that SilverCrest Metals is also expected to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around SilverCrest Metals' earnings potential next year. Happily, they also upgraded their revenue estimates, and are forecasting them 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 in mind, we wouldn't be too quick to come to a conclusion on SilverCrest Metals. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple SilverCrest Metals analysts - going out to 2026, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with SilverCrest Metals (at least 1 which is a bit concerning) , and understanding these should be part of your investment process.

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.