What Does Torex Gold’s 114% Surge Mean After Media Luna Project Milestone in 2025?

If you have been watching Torex Gold Resources lately, you are definitely not alone. Investors are buzzing about this stock, and for good reason. Just this past year, Torex Gold’s share price has leaped by 136.4%. That dazzling return is only part of the story. In fact, since the start of 2024, the stock has surged a staggering 114.7%. Even more remarkable, Torex has delivered a massive 521.6% return over the last three years, leaving long-term holders more than satisfied and catching the attention of anyone tracking gold miners.

So, what’s behind these impressive numbers? Recent market sentiment around gold prices, driven by geopolitical uncertainties and shifting central bank policies, has certainly played a role. Investors have flocked to quality gold producers, recalibrating risk and reward expectations across the sector. Within that landscape, Torex Gold’s strong operations and healthy balance sheet have helped drive renewed optimism about its growth potential.

But as any thoughtful investor knows, past performance isn’t the whole story. With the stock closing recently at 63.03, the real question is whether shares are still undervalued or if much of the upside has already been priced in. According to a widely-used valuation score that checks for undervaluation across six key methods, Torex Gold scores a solid 4 out of 6. That tells us the company looks attractively valued on several fronts, but there’s more to consider before making your next move.

Let’s break down these different valuation approaches one by one. If you stick with me to the end, I’ll share an even sharper way to think about value for Torex Gold Resources.

Torex Gold Resources delivered 136.4% returns over the last year. See how this stacks up to the rest of the Metals and Mining industry.

Approach 1: Torex Gold Resources Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model is a widely used valuation method that estimates a company's intrinsic value by forecasting its future cash flows and then discounting them back to today's value. This approach allows investors to assess what the business is truly worth, focusing on fundamental earnings potential rather than market swings.

For Torex Gold Resources, the DCF analysis focuses on projected Free Cash Flows (FCF) in US dollars. Currently, Torex has reported a last twelve months FCF of negative $187.2 Million, which may indicate significant recent investment or operational costs. Looking ahead, analyst estimates show impressive projected recovery and growth. By the end of 2029, FCF is expected to reach around $499.4 Million. Over ten years, projections indicate a steady transition from losses to robust positive cash flows, with analyst consensus for the first five years and longer-term figures extrapolated from industry trends.

Based on this DCF model, the estimated fair value for Torex Gold is $169.40 per share, compared to a recent share price of $63.03. This suggests the stock is trading at a 62.8% discount to its intrinsic value according to cash flow projections.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Torex Gold Resources.

Our Discounted Cash Flow (DCF) analysis suggests Torex Gold Resources is undervalued by 62.8%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Torex Gold Resources Price vs Earnings (P/E)

The price-to-earnings (P/E) ratio is a common metric for valuing companies with consistent profitability, such as Torex Gold Resources. This ratio helps investors understand how much they are paying for each dollar of current earnings, which is particularly meaningful when a company generates reliable profits.

A company’s fair P/E multiple depends on factors such as expected earnings growth, risk profile, and how its operations compare to industry peers. Generally, higher growth prospects and lower risk justify a higher P/E, while more uncertainty or slower growth typically push the fair multiple down.

Torex Gold Resources currently trades at a P/E of 18.4x. This compares favorably with the broader Metals and Mining industry average of 23.6x and stands out against the peer group average of a negative 20.5x, which is less informative due to peer losses or negative earnings. While such benchmarks offer context, they may overlook unique features of the business.

This is where Simply Wall St’s proprietary “Fair Ratio” is used. Unlike peers or industry averages, the Fair Ratio considers Torex Gold’s specific earnings growth, margins, market capitalization, industry landscape, and risk profile to determine what is truly a justified multiple. In Torex’s case, the Fair Ratio is 32.9x, much higher than its current P/E of 18.4x. This gap indicates the company’s shares may be undervalued on earnings-based measures when calibrated for its particular strengths and outlook.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Torex Gold Resources Narrative

Earlier, we mentioned that there is an even better way to understand valuation, so let’s introduce you to Narratives. Narratives are a straightforward, powerful tool that lets investors connect their personal story and perspective with financial forecasts, linking what they believe about a company’s future with estimates for revenue, earnings, and margins, and ultimately, their own fair value calculation.

By framing an investment as a story backed up by numbers, Narratives help you see how Torex Gold’s journey, future projects, and risks translate into a dynamic fair value. This makes decision-making much clearer. Narratives are accessible right on Simply Wall St’s Community page, where millions of investors share their perspectives and update them automatically as new news or earnings are released, so your view stays relevant and up to date.

Using Narratives, you can compare the fair value you believe in with the current market price to decide when to buy or sell, making investing less about guesswork and more about your best-informed belief. For example, some investors see Torex Gold’s Media Luna project and recent acquisitions driving future profits, setting a high fair value of CA$71.0. Others, cautious about operational and jurisdictional risks, assign a lower fair value of CA$52.0. Narratives empower you to find your own story within the numbers and act with conviction.

Do you think there's more to the story for Torex Gold Resources? Create your own Narrative to let the Community know!

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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