Sandstorm Gold Ltd. Just Missed EPS By 8.2%: Here's What Analysts Think Will Happen Next

Sandstorm Gold Ltd. (TSE:SSL) shareholders are probably feeling a little disappointed, since its shares fell 7.7% to CA$7.98 in the week after its latest first-quarter results. It was a pretty mixed result, with revenues beating expectations to hit US$37m. Statutory earnings fell 8.2% short of analyst forecasts, reaching US$0.052 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Sandstorm Gold

Following the latest results, Sandstorm Gold's nine analysts are now forecasting revenues of US$131.6m in 2022. This would be a solid 10% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to grow 19% to US$0.20. In the lead-up to this report, the analysts had been modelling revenues of US$131.3m and earnings per share (EPS) of US$0.20 in 2022. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at CA$13.08. 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. Currently, the most bullish analyst values Sandstorm Gold at CA$14.00 per share, while the most bearish prices it at CA$12.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Sandstorm Gold is an easy business to forecast or the the analysts are all using similar assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Sandstorm Gold's past performance and to peers in the same industry. The period to the end of 2022 brings more of the same, according to the analysts, with revenue forecast to display 14% growth on an annualised basis. That is in line with its 13% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 10% per year. So it's pretty clear that Sandstorm Gold is forecast to grow substantially faster than its industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Sandstorm Gold going out to 2024, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 3 warning signs for Sandstorm Gold (1 is a bit unpleasant) you should be aware of.

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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.