Assessing TRX Gold (TSX:TRX)’s Valuation Following Q4 Production Surge and Buckreef Expansion

TRX Gold (TSX:TRX) just delivered its fourth quarter 2025 operating results, highlighting a 37% jump in gold production and clear improvements to its processing infrastructure. The ongoing momentum at the Buckreef Gold Project is fueling investor interest.

See our latest analysis for TRX Gold.

TRX Gold’s record gold production and processing upgrades are resonating with investors, as shown by the company’s sharp share price return of nearly 63% over the past month and a year-to-date price gain of 148%. With the latest results helping momentum build, TRX Gold’s one-year total shareholder return has soared to 111%, which is evidence that both the short- and long-term story are lining up for shareholders.

If you’re watching this surge and want to see what other companies are gaining steam, it’s a great moment to discover fast growing stocks with high insider ownership

With shares rallying on record production and plant expansions, the spotlight turns to valuation. Is TRX Gold still undervalued given its rapid progress, or are investors already pricing in those future growth prospects?

Price-to-Sales of 4.8x: Is it justified?

TRX Gold currently trades at a Price-to-Sales (P/S) ratio of 4.8x, well below the peer average of 15.1x. With a last close of CA$1.14, this suggests the market has not fully priced in the company’s rapid growth and recent profitability.

The price-to-sales ratio shows how much investors are willing to pay for each dollar of the company’s revenue. For a miner rapidly expanding production, this provides insight into how the market values sales momentum compared to future uncertainties or cyclical risks. With a P/S of 4.8x compared to a much steeper peer average, investors may be gaining growth exposure at a relative discount.

Compared to the Canadian Metals and Mining industry, where the average P/S is 5.8x, TRX Gold appears attractively valued. However, when set beside the estimated fair P/S ratio of 4.6x, shares trade just slightly above what longer-term valuation models suggest is justified, indicating a potential catch-up or leveling in future market moves.

Explore the SWS fair ratio for TRX Gold

Result: Price-to-Sales of 4.8x (UNDERVALUED)

However, persisting operational challenges or a downturn in gold prices could quickly reverse TRX Gold’s recent gains and stall its current momentum.

Find out about the key risks to this TRX Gold narrative.

Another View: SWS DCF Model Offers a Different Perspective

While the price-to-sales ratio suggests TRX Gold is trading at a discount to peers, our DCF model points to even deeper undervaluation, with shares trading approximately 90% below fair value. Could the market be missing something, or are there risks that the multiples approach cannot capture?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out TRX Gold for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own TRX Gold Narrative

If you want to dive deeper, challenge these findings, or rely on your own research, you can create a personalized view in just a few minutes and explore your own insights. Do it your way

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding TRX Gold.

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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.

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