Here’s What Analysts Are Forecasting Now
It’s been a sad week for SilverCrest Metals Inc. (TSE:SIL), who’ve watched their investment drop 12% to CA$10.76 in the week since the company reported its second-quarter result. Statutory earnings per share fell badly short of expectations, coming in at US$0.04, some 74% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at US$73m. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there’s been a strong change in the company’s prospects, or if it’s business as usual. We’ve gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
View our latest analysis for SilverCrest Metals
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Taking into account the latest results, the current consensus from SilverCrest Metals’ five analysts is for revenues of US$283.8m in 2024. This would reflect a notable 8.5% increase on its revenue over the past 12 months. Per-share earnings are expected to increase 2.1% to US$0.73. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$269.8m and earnings per share (EPS) of US$0.69 in 2024. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.
Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of CA$13.56, suggesting that the forecast performance does not have a long term impact on the company’s valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company’s valuation. There are some variant perceptions on SilverCrest Metals, with the most bullish analyst valuing it at CA$15.50 and the most bearish at CA$11.50 per share. This is a very narrow spread of estimates, implying either that SilverCrest Metals is an easy company to value, or – more likely – the analysts are relying heavily on some key assumptions.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that SilverCrest Metals’ revenue growth is expected to slow, with the forecast 18% annualised growth rate until the end of 2024 being well below the historical 85% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 13% annually. So it’s pretty clear that, while SilverCrest Metals’ revenue growth is expected to slow, it’s still expected to grow faster than the industry itself.
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The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards SilverCrest Metals following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. The consensus price target held steady at CA$13.56, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year’s earnings. We have estimates – from multiple SilverCrest Metals analysts – going out to 2026, and you can see them free on our platform here.
We don’t want to rain on the parade too much, but we did also find 2 warning signs for SilverCrest Metals (1 is concerning!) that you need to be mindful 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.
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