Sandstorm Gold (TSX:SSL) - Share price, News & Analysis

Q: What is the Fair Price of SSL when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

SSL (CA$8.18) is trading below our estimate of [[fair value]] (CA$29.55)

SSL fundamental analysis
Snowflake Score
Valuation	3/6
Future Growth	1/6
Past Performance	5/6
Financial Health	6/6
Dividends	0/6

SSL Stock Overview

Sandstorm Gold Ltd. operates as a gold royalty company.

Rewards

Trading at 72.3% below our estimate of its fair value

Revenue is forecast to grow 16.13% per year

Earnings grew by 105.2% over the past year

Risk Analysis

Shareholders have been diluted in the past year

Sandstorm Gold Competitors

Wesdome Gold Mines

TSX:WDO

CA$1.4b

OceanaGold

TSX:OGC

CA$1.6b

Dundee Precious Metals

TSX:DPM

CA$1.3b

China Gold International Resources

TSX:CGG

CA$1.5b

Price History & Performance

Summary of all time highs, changes and price drops for Sandstorm Gold
Historical stock prices
Current Share Price	CA$8.18
52 Week High	CA$11.61
52 Week Low	CA$6.86
Beta	0.96
1 Month Change	9.65%
3 Month Change	2.51%
1 Year Change	-6.30%
3 Year Change	2.51%
5 Year Change	47.39%
Change since IPO	1,158.46%

Shareholder Returns

	SSL	CA Metals and Mining	CA Market
7D	8.5%	4.4%	3.0%
1Y	-6.3%	-14.2%	0.7%

Return vs Industry: SSL exceeded the Canadian Metals and Mining industry which returned -14.7% over the past year.

Return vs Market: SSL underperformed the Canadian Market which returned -0.2% over the past year.

Price Volatility

Is SSL's price volatile compared to industry and market?
SSL volatility
SSL Average Weekly Movement	6.1%
Metals and Mining Industry Average Movement	11.6%
Market Average Movement	10.6%
10% most volatile stocks in CA Market	19.0%
10% least volatile stocks in CA Market	4.3%

Stable Share Price: SSL is less volatile than 75% of Canadian stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: SSL's weekly volatility (6%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2007	n/a	Nolan Watson	https://www.sandstormgold.com

Sandstorm Gold Ltd. operates as a gold royalty company. The company focuses on acquiring royalties and gold and other metals purchase agreements (streams) from companies that have advanced stage development projects or operating mines. It offers upfront payments for companies to acquire a stream or royalty and receives the right to purchase a percentage of a mine’s production for the life of the mine at a fixed price per unit or at a fixed percentage of the spot price.

Sandstorm Gold Fundamentals Summary

How do Sandstorm Gold's earnings and revenue compare to its market cap?
SSL fundamental statistics
Market Cap	US$1.32b
Earnings (TTM)	US$62.85m
Revenue (TTM)	US$128.75m

20.9x

P/E Ratio

10.2x

P/S Ratio

Is SSL overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
SSL income statement (TTM)
Revenue	US$128.75m
Cost of Revenue	US$27.39m
Gross Profit	US$101.37m
Other Expenses	US$38.51m
Earnings	US$62.85m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

Aug 12, 2022

Earnings per share (EPS)	0.31
Gross Margin	78.73%
Net Profit Margin	48.82%
Debt/Equity Ratio	0%

How did SSL perform over the long term?

See historical performance and comparison

Dividends

1.0%

Current Dividend Yield

10%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is SSL undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for SSL?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for SSL. This is calculated by dividing SSL's market cap by their current preferred multiple.
What is SSL's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$1.32b

SSL key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	10x
Enterprise Value/EBITDA	14.5x
PEG Ratio	n/a

Price to Earnings Ratio vs Peers

How does SSL's PE Ratio compare to its peers?

SSL PE Ratio vs Peers

The above table shows the PE ratio for SSL vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	19.9x
WDO Wesdome Gold Mines	43.2x	75.5%	CA$1.4b
OGC OceanaGold	25.9x	39.7%	CA$1.6b
DPM Dundee Precious Metals	6.3x	28.3%	CA$1.3b
CGG China Gold International Resources	4.1x	5.8%	CA$1.5b
SSL Sandstorm Gold	20.9x	n/a	CA$1.7b

Price-To-Earnings vs Peers: SSL is expensive based on its Price-To-Earnings Ratio (20.9x) compared to the peer average (19.9x).

Price to Earnings Ratio vs Industry

How does SSL's PE Ratio compare vs other companies in the CA Metals and Mining Industry?

Price-To-Earnings vs Industry: SSL is expensive based on its Price-To-Earnings Ratio (20.9x) compared to the Canadian Metals and Mining industry average (10.4x)

Price to Earnings Ratio vs Fair Ratio

What is SSL's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

SSL PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	20.9x
Fair PE Ratio	n/a

Price-To-Earnings vs Fair Ratio: Insufficient data to calculate SSL's Price-To-Earnings Fair Ratio for valuation analysis.

Share Price vs Fair Value

What is the Fair Price of SSL when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: SSL (CA$8.18) is trading below our estimate of fair value (CA$29.55)

Significantly Below Fair Value: SSL is trading below fair value by more than 20%.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.

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Future Growth

How is Sandstorm Gold forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

16.1%

Forecasted annual revenue growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: Insufficient data to determine if SSL's forecast earnings growth is above the savings rate (1.6%).

Earnings vs Market: Insufficient data to determine if SSL's earnings are forecast to grow faster than the Canadian market

High Growth Earnings: Insufficient data to determine if SSL's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: SSL's revenue (16.1% per year) is forecast to grow faster than the Canadian market (6.4% per year).

High Growth Revenue: SSL's revenue (16.1% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: Insufficient data to determine if SSL's Return on Equity is forecast to be high in 3 years time

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Past Performance

How has Sandstorm Gold performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

41.5%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: SSL has high quality earnings.

Growing Profit Margin: SSL's current net profit margins (48.8%) are higher than last year (27.7%).

Past Earnings Growth Analysis

Earnings Trend: SSL's earnings have grown significantly by 41.5% per year over the past 5 years.

Accelerating Growth: SSL's earnings growth over the past year (105.2%) exceeds its 5-year average (41.5% per year).

Earnings vs Industry: SSL earnings growth over the past year (105.2%) exceeded the Metals and Mining industry -16.5%.

Return on Equity

High ROE: SSL's Return on Equity (10.1%) is considered low.

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Financial Health

How is Sandstorm Gold's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: SSL's short term assets ($35.3M) exceed its short term liabilities ($14.2M).

Long Term Liabilities: SSL's short term assets ($35.3M) exceed its long term liabilities ($26.7M).

Debt to Equity History and Analysis

Debt Level: SSL is debt free.

Reducing Debt: SSL had no debt 5 years ago.

Debt Coverage: SSL has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: SSL has no debt, therefore coverage of interest payments is not a concern.

Balance Sheet

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Dividend

What is Sandstorm Gold current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

0.95%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: SSL's dividend (0.95%) isn’t notable compared to the bottom 25% of dividend payers in the Canadian market (1.82%).

High Dividend: SSL's dividend (0.95%) is low compared to the top 25% of dividend payers in the Canadian market (5.32%).

Stability and Growth of Payments

Stable Dividend: SSL is not paying a notable dividend for the Canadian market, therefore no need to check if payments are stable.

Growing Dividend: SSL is not paying a notable dividend for the Canadian market, therefore no need to check if payments are increasing.

Earnings Payout to Shareholders

Earnings Coverage: SSL is not paying a notable dividend for the Canadian market.

Cash Payout to Shareholders

Cash Flow Coverage: SSL is not paying a notable dividend for the Canadian market.

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Management

How experienced are the management team and are they aligned to shareholders interests?

6.6yrs

Average management tenure

CEO

Nolan Watson (42 yo)

13.92yrs

Tenure

US$1,860,779

Compensation

Mr. Nolan Allan Watson, BComm, CA, CFA, F.C.A., FCPA, has been the Chief Executive Officer and President of Sandstorm Gold Ltd. (also known as, Sandstorm Resources Ltd.) since September 23, 2008. He serves...

CEO Compensation Analysis

Compensation vs Market: Nolan's total compensation ($USD1.86M) is about average for companies of similar size in the Canadian market ($USD2.22M).

Compensation vs Earnings: Nolan's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: SSL's management team is seasoned and experienced (6.6 years average tenure).

Board Members

Experienced Board: SSL's board of directors are seasoned and experienced ( 13.4 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: SSL insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 5.6%.

Data	Last Updated (UTC time)
Company Analysis	2022/08/12 00:00
End of Day Share Price	2022/08/12 00:00
Earnings	2022/06/30
Annual Earnings	2021/12/31