Analysts Just Slashed Their i-80 Gold Corp. (TSE:IAU) EPS Numbers
Market forces rained on the parade of i-80 Gold Corp. (TSE:IAU) shareholders today, when the analysts downgraded their forecasts for next year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.
Following the downgrade, the latest consensus from i-80 Gold's four analysts is for revenues of US$252m in 2027, which would reflect a sizeable 92% improvement in sales compared to the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 64% to US$0.11. Yet before this consensus update, the analysts had been forecasting revenues of US$280m and losses of US$0.041 per share in 2027. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.
View our latest analysis for i-80 Gold
The consensus price target was broadly unchanged at US$3.29, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the 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. The most optimistic i-80 Gold analyst has a price target of US$3.97 per share, while the most pessimistic values it at US$2.86. 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 i-80 Gold 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. The analysts are definitely expecting i-80 Gold's growth to accelerate, with the forecast 69% annualised growth to the end of 2027 ranking favourably alongside historical growth of 45% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 14% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect i-80 Gold to grow faster than the wider industry.
The Bottom Line
The most important thing to note from this downgrade is that the consensus increased its forecast losses next year, suggesting all may not be well at i-80 Gold. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. We're also surprised to see that the price target went unchanged. Still, deteriorating business conditions (assuming accurate forecasts!) can be a leading indicator for the stock price, so we wouldn't blame investors for being more cautious on i-80 Gold after the downgrade.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple i-80 Gold analysts - going out to 2028, and you can see them free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.
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