Westgold Resources Limited Just Missed Earnings - But Analysts Have Updated Their Models
It's been a good week for Westgold Resources Limited (ASX:WGX) shareholders, because the company has just released its latest full-year results, and the shares gained 5.9% to AU$6.66. Revenues of AU$2.4b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at AU$0.48, missing estimates by 7.7%. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
After the latest results, the six analysts covering Westgold Resources are now predicting revenues of AU$2.56b in 2027. If met, this would reflect a modest 4.7% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to soar 48% to AU$0.70. In the lead-up to this report, the analysts had been modelling revenues of AU$2.55b and earnings per share (EPS) of AU$0.75 in 2027. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.
View our latest analysis for Westgold Resources
It might be a surprise to learn that the consensus price target was broadly unchanged at AU$7.26, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on 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. Currently, the most bullish analyst values Westgold Resources at AU$8.26 per share, while the most bearish prices it at AU$6.36. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Westgold Resources shareholders.
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. It's pretty clear that there is an expectation that Westgold Resources' revenue growth will slow down substantially, with revenues to the end of 2027 expected to display 4.7% growth on an annualised basis. This is compared to a historical growth rate of 32% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 6.2% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Westgold Resources.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Westgold Resources. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Westgold Resources' revenue is expected to perform worse than the wider industry. The consensus price target held steady at AU$7.26, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Westgold Resources going out to 2029, and you can see them free on our platform here.
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
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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.