What Do Analysts Think About The Future Of Tahoe Resources Inc’s (TSE:THO)?

In December 2017, Tahoe Resources Inc (TSX:THO) announced its most recent earnings update, which confirmed that the business faced a substantial headwind with earnings deteriorating by -30.61%. Below is a brief commentary on my key takeaways on how market analysts predict Tahoe Resources’s earnings growth outlook over the next few years and whether the future looks brighter. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings. See our latest analysis for Tahoe Resources

Market analysts’ consensus outlook for the upcoming year seems pessimistic, with earnings decreasing by -5.71%. But in the following year, there is a complete contrast in performance, with earnings more than double that of today’s level, before reaching US$213.53M in 2021.

TSX:THO Future Profit Mar 30th 18
TSX:THO Future Profit Mar 30th 18

While it’s helpful to be aware of the rate of growth each year relative to today’s figure, it may be more valuable to gauge the rate at which the business is moving on average every year. The advantage of this technique is that it removes the impact of near term flucuations and accounts for the overarching direction of Tahoe Resources’s earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I put a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 25.84%. This means that, we can presume Tahoe Resources will grow its earnings by 25.84% every year for the next few years.

Next Steps:

For Tahoe Resources, I’ve put together three pertinent aspects you should further examine:

  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
  2. Valuation: What is THO worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether THO is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of THO? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!