Earnings Miss: Wesdome Gold Mines Ltd. Missed EPS And Analysts Are Revising Their Forecasts

Last week, you might have seen that Wesdome Gold Mines Ltd. (TSE:WDO) released its yearly result to the market. The early response was not positive, with shares down 8.8% to CA$9.31 in the past week. Things were not great overall, with a surprise (statutory) loss of CA$0.04 per share on revenues of CA$333m, even though the analysts had been expecting a profit. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Wesdome Gold Mines

Taking into account the latest results, the consensus forecast from Wesdome Gold Mines' five analysts is for revenues of CA$441.0m in 2024. This reflects a substantial 32% improvement in revenue compared to the last 12 months. Earnings are expected to improve, with Wesdome Gold Mines forecast to report a statutory profit of CA$0.34 per share. Before this earnings report, the analysts had been forecasting revenues of CA$455.3m and earnings per share (EPS) of CA$0.43 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a large cut to earnings per share numbers.

Despite the cuts to forecast earnings, there was no real change to the CA$10.12 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Wesdome Gold Mines at CA$14.00 per share, while the most bearish prices it at CA$7.15. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting Wesdome Gold Mines' growth to accelerate, with the forecast 32% annualised growth to the end of 2024 ranking favourably alongside historical growth of 18% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 11% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Wesdome Gold Mines to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Wesdome Gold Mines. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. The consensus price target held steady at CA$10.12, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Wesdome Gold Mines going out to 2026, and you can see them free on our platform here..

You still need to take note of risks, for example - Wesdome Gold Mines has 1 warning sign we think 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.