A month has gone by since the last earnings report for Royal Gold (RGLD Quick QuoteRGLD - Free Report) . Shares have added about 0.6% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Royal Gold due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Royal Gold Earnings Beat Estimates in Q3, Up Y/Y

Royal Gold reported adjusted earnings per share of 84 cents in third-quarter fiscal 2021, beating the Zacks Consensus Estimate of 81 cents. The bottom line also improved 23.5%, year over year, aided by outstanding performance of the company’s operating portfolio and continued robust metal prices.

Including one-time items, the company reported earnings per share of 82 cents compared with the prior-year quarter’s 59 cents.

The company generated revenues of $143 million, reflecting year-over-year growth of 5%. Stream revenues were down 2.2% year over year to $95.3 million, while royalty revenues climbed 20.5% to $47.3 million year over year. Gains from higher gold, silver and copper prices, and an increase in gold production at Penasquito mine drove revenues in the quarter. The top-line figure, however, missed the Zacks Consensus Estimate of $149.7 million.

The company’s cost of sales came in at $21.4 million in the fiscal third quarter, flat year over year. General and administrative expenses amounted to $7 million, down 27.3% year on year. Adjusted EBITDA was $114 million in the reported quarter and adjusted EBITDA margin was 79.7%.

Financial Position

Net cash from operating activities was $92.2 million in the fiscal third quarter compared with the prior-year quarter’s $99.6 million. Royal Gold ended the reported quarter with $370 million cash in hand, up from the $319 million held at the end of fiscal 2020.Royal Gold is now debt free after it repaid $150-million outstanding balance on revolving credit facility in April. The company has now available credit facility of $1 billion.

Other Updates

Management stated that the Khoemacau Project (Khoemacau) reached approximately 92% of construction completion as of Mar 31, 2021. A seventh advance payment of $10.6 million made on Apr 7, suggesting Royal Gold’s right to purchase 84% of silver stream.

Outlook

For fourth-quarter fiscal 2021, Royal Gold expects stream segment sales between 60,000 and 65,000 GEOs (Gold Equivalent Ounces). Inventory at the end of the quarter is projected to range between 31,000 and 36,000 GEOs.

For fiscal 2021, depreciation, depletion and amortization expense is estimated to be $540-$590 per GEO, and the effective tax rate is expected to lie between 19% and 23%.

 

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates flatlined during the past month.

VGM Scores

At this time, Royal Gold has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Royal Gold has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.