Earnings Update: McEwen Mining Inc. (NYSE:MUX) Just Reported And Analysts Are Boosting Their Estimates

McEwen Mining Inc. (NYSE:MUX) investors will be delighted, with the company turning in some strong numbers with its latest results. McEwen Mining outperformed estimates, with revenues of US$52m beating estimates by 19%. Statutory losses were US$0.04, 62% smaller thanthe analysts expected. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for McEwen Mining

Taking into account the latest results, the most recent consensus for McEwen Mining from three analysts is for revenues of US$239.8m in 2025. If met, it would imply a substantial 20% increase on its revenue over the past 12 months. The company is forecast to report a statutory loss of US$0.13 in 2025, a sharp decline from a profit over the last year. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$216.7m and losses of US$0.12 per share in 2025. Ergo, there's been a clear change in sentiment, with the analysts lifting next year's revenue estimates, while at the same time increasing their loss per share numbers to reflect the cost of achieving this growth.

The average price target rose 6.5% to US$14.44, even thoughthe analysts have been updating their forecasts to show higher revenues and higher forecast losses. 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 McEwen Mining at US$19.00 per share, while the most bearish prices it at US$12.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that McEwen Mining's rate of growth is expected to accelerate meaningfully, with the forecast 16% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 9.7% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.4% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that McEwen Mining is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on McEwen Mining. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for McEwen Mining going out to 2025, and you can see them free on our platform here..

You still need to take note of risks, for example - McEwen Mining has 3 warning signs (and 2 which make us uncomfortable) we think you should know about.

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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.