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Royal Gold (RGLD)
NASDAQ:RGLD
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Royal Gold
(NASDAQ:RGLD)
78Outperform
Positive Factors
Company Growth
The company maintains a compelling growth profile, second only to WPM among its peers, with expectations that the valuation gap will close as production grows.
Financial Performance
Q4’24 earnings beat expectations driven by higher revenues, especially from the royalty segment.
Financial Stability
Net cash and liquidity improved significantly, with outstanding debt cleared during the quarter.
Negative Factors
Guidance and Forecasts
2025 guidance points to another potential down year.
Production Issues
Royal expects reduced sales volumes in the first half of 2025 on anticipated lower gold production at Mt. Milligan.
Sales Performance
The 2025 gold sales guidance was lower than expected, with a range of 210-230koz falling short of the 244koz estimate.
Royal Gold (RGLD) vs. S&P 500 (SPY)
Market Cap
$10.48B
Dividend Yield1.03%
Average Volume (3M)486.63K
Price to Earnings (P/E)31.7
Beta (1Y)0.71
Revenue Growth18.77%
EPS Growth38.55%
CountryUS
Employees30
SectorBasic Materials
Sector Strength58
IndustryMining
Share Statistics
EPS (TTM)5.05
Shares Outstanding65,758,610
10 Day Avg. Volume533,462
30 Day Avg. Volume486,625
Financial Highlights & Ratios
PEG Ratio0.82
Price to Book (P/B)N/A
Price to Sales (P/S)14.35
Price to Cash Flow (P/CF)18.30
P/FCF Ratio18.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$169.83Price Target Upside5.29% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
Royal Gold Business Overview & Revenue Model
Company DescriptionRoyal Gold, Inc. (RGLD) is a leading precious metals streaming and royalty company primarily engaged in the acquisition and management of precious metal streams and royalty interests. Headquartered in Denver, Colorado, Royal Gold focuses on gold, silver, copper, and other precious metals projects. The company does not operate mines itself but invests in mining companies by providing upfront capital in exchange for rights to purchase a percentage of the mine's future production at a predetermined price. This strategic approach allows Royal Gold to benefit from the mining operations without assuming the operational risks associated with mine ownership.
How the Company Makes MoneyRoyal Gold generates revenue through its streaming and royalty agreements with mining companies. Under these agreements, Royal Gold provides capital to mining companies for the development of mining projects in exchange for a percentage of the mine's future production at a fixed, below-market price, or a percentage of revenue. The company earns income primarily from the sale of the metals it receives through these agreements at market prices, which can be significantly higher than the fixed costs. Additionally, Royal Gold benefits from increases in metal prices and production levels at the mines in which it holds interests. Key revenue streams for the company include royalties, which are calculated as a percentage of revenue from the mine, and streams, which involve purchasing a portion of the mine's production at a discounted rate. The company also seeks to diversify its portfolio by entering into agreements with multiple mining operators across different geographic locations and maintaining a focus on high-quality, long-life assets. Significant partnerships with established mining companies and a disciplined approach to investment further contribute to Royal Gold's earnings and growth potential.
Royal Gold Financial Statement Overview
Summary
Royal Gold exhibits strong financial performance with robust revenue and net income growth. The company benefits from a high EBIT and EBITDA margin, though there is room for improvement in net profit margins and cost control. The balance sheet is exceptionally strong with zero debt and a high equity ratio, and cash flow remains solid with potential for enhanced capital expenditure efficiency.Income Statement
Royal Gold shows strong financial performance, evidenced by a consistent increase in total revenue and net income. The TTM (Trailing-Twelve-Months) figures reflect a robust EBIT margin of 56.19% and an EBITDA margin of 79.35%, indicating efficient operational management and a high degree of profitability. The revenue growth rate from the previous year is 10.53%, demonstrating positive growth momentum. However, net profit margin is slightly lower at 42.93% compared to its high gross profit margin of 62.41%, suggesting room for improvement in cost control further down the income statement.87
Very Positive
Balance Sheet
Royal Gold's balance sheet is exceptionally strong with zero total debt in the latest TTM period, highlighting its low financial risk. The equity ratio stands at a healthy 92.00%, indicating a stable financial structure predominantly financed by equity. The return on equity is impressive at 9.46%, showcasing effective utilization of shareholders' funds. The company's solid asset base and high equity level suggest a strong capacity to withstand market fluctuations.90
Very Positive
Cash Flow
The cash flow statement reflects solid cash generation capabilities with a 5.68% increase in free cash flow in the TTM compared to the previous year, signifying strong operational cash inflows. The operating cash flow to net income ratio of 1.70 indicates strong cash conversion efficiency. However, the free cash flow to net income ratio of 1.52, while good, suggests potential for further improvement in capital expenditure efficiency.83
Very Positive
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 669.50M | 605.72M | 603.21M | 645.17M | 615.86M | 498.82M | Gross Profit |
| 417.91M | 342.96M | 322.61M | 546.70M | 332.65M | 235.67M | EBIT |
| 376.14M | 303.20M | 283.71M | 328.39M | 337.60M | 198.94M | EBITDA |
| 531.29M | 468.14M | 474.76M | 517.40M | 489.71M | 377.77M | Net Income Common Stockholders |
| 287.39M | 239.44M | 238.98M | 274.04M | 302.53M | 199.34M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 137.95M | 104.17M | 118.59M | 143.55M | 225.92M | 319.13M | Total Assets |
| 3.31B | 3.36B | 3.53B | 2.76B | 2.65B | 2.77B | Total Debt |
| 146.19M | 251.61M | 571.57M | 0.00 | 0.00 | 300.44M | Net Debt |
| 8.24M | 147.44M | 452.99M | -143.55M | -225.92M | -18.69M | Total Liabilities |
| 389.94M | 460.42M | 781.05M | 155.82M | 148.19M | 464.17M | Stockholders Equity |
| 2.91B | 2.89B | 2.74B | 2.59B | 2.49B | 2.27B |
| Cash Flow | Free Cash Flow | ||||
| 436.53M | 413.11M | -504.81M | 61.49M | 239.00M | 184.77M | Operating Cash Flow |
| 489.54M | 415.79M | 417.35M | 461.87M | 407.15M | 340.75M | Investing Cash Flow |
| -30.78M | -2.83M | -922.88M | -416.97M | -116.74M | -152.86M | Financing Cash Flow |
| -433.78M | -427.38M | 480.57M | -283.21M | -383.63M | 11.76M |
Royal Gold Technical Analysis
Positive
161.30
Price Trends
148.00
Positive
144.82
Positive
140.47
Positive
Market Momentum
3.30
Negative
71.12
Negative
76.21
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RGLD, the sentiment is Positive. The current price of 161.3 is above the 20-day moving average (MA) of 153.97, above the 50-day MA of 148.00, and above the 200-day MA of 140.47, indicating a bullish trend. The MACD of 3.30 indicates Negative momentum. The RSI at 71.12 is Negative, neither overbought nor oversold. The STOCH value of 76.21 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RGLD.
Royal Gold Risk Analysis
Royal Gold disclosed 25 risk factors in its most recent earnings report. Royal Gold reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Royal Gold Peers Comparison
Overall Rating
UnderperformOutperform
Sector (47)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $10.48B | 31.74 | 11.05% | 1.03% | 18.77% | 38.55% | |
75 Outperform | C$49.75B | 67.25 | 7.43% | 0.82% | 30.91% | 14.58% | |
74 Outperform | $42.15B | 56.60 | 9.38% | 0.94% | -7.22% | ― | |
70 Outperform | $3.12B | 159.88 | 1.00% | 0.78% | 0.80% | 137.87% | |
56 Neutral | C$5.54B | 252.59 | 1.33% | 0.90% | 1.62% | -232.31% | |
47 Neutral | $2.71B | -3.60 | -20.77% | 3.28% | 3.41% | -27.70% |
* Basic Materials Sector Average
Performance Comparison
RGLD
Royal Gold
161.30
41.01
34.09%
TSE:SSL
Sandstorm Gold
10.96
3.93
55.95%
TSE:OR
Osisko Gold Royalties
29.67
7.62
34.56%
TSE:WPM
Wheaton Precious Metals
109.67
46.57
73.79%
TSE:FNV
Franco-Nevada
224.94
65.39
40.99%
Royal Gold Earnings Call Summary
Earnings Call Date: Feb 12, 2025 | % Change Since: 9.59% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong financial performance for 2024, with record revenue and significant dividend increases highlighting the company's positive growth trajectory. However, challenges such as lower than expected silver sales and uncertainty in long-term guidance for key assets were noted. The strong highlights outweigh the lowlights, suggesting a positive outlook for the company.Highlights
Record Revenue and Financial Performance
Royal Gold achieved record revenue, operating cash flow, and earnings for both the annual and quarterly periods in 2024. Full-year revenue was $719 million, operating cash flow was $530 million, and net income was $332 million, representing increases of 19%, 27%, and 39% respectively over 2023.
Strong EBITDA Margin
The company reported an adjusted EBITDA margin of over 81% for the year, with the fourth quarter reaching almost 84%.
Significant Dividend Increase
Royal Gold paid over $105 million in dividends and raised its annual dividend to $1.80 per share for 2025, marking the 24th consecutive annual dividend increase.
Debt-Free Status and Strong Liquidity
The company repaid its revolving credit facility and ended the year with no debt and approximately $1.2 billion of available liquidity.
Positive Developments in Key Projects
New revenue was generated from MarRosa, Manchow, and Cote gold mines, with new agreements and royalties added for other promising projects.
Lowlights
Disappointing Silver Sales
Silver sales were slightly lower than the guidance range, primarily due to lower silver deliveries and sales from Pointe Lo Viejo, continuing a trend of disappointing silver recovery.
Deferred Silver Deliveries at Pueblo Viejo
Deferred silver deliveries amounted to 1.7 million ounces, impacting potential revenue.
Uncertainty in Long-Term Guidance on Key Assets
Challenges in forecasting production levels at Cortez and other key assets due to dependence on third-party operators.
Company Guidance
During the Royal Gold 2024 Full Year and Fourth Quarter Conference Call, the company provided comprehensive guidance on its financial and operational performance. For the fiscal year, Royal Gold achieved record revenue of $719 million, operating cash flow of $530 million, and net income of $332 million, marking increases of 19%, 27%, and 39%, respectively, over the previous year. On an adjusted basis, earnings were $346 million or $5.26 per share. The company's revenue was primarily driven by gold, which accounted for 76% of the total, with significant contributions also coming from the US, Canada, and Australia. Royal Gold's adjusted EBITDA margin for the year was over 81%, peaking at nearly 84% in the fourth quarter. Despite inflationary pressures, the company's business model shielded it from direct impacts, maintaining strong margins alongside rising gold prices. In 2024, Royal Gold returned over $105 million to shareholders via dividends and increased its annual dividend to $1.80 per share for 2025, marking the 24th consecutive annual increase. The company also highlighted its debt-free status with $1.2 billion in available liquidity at year-end. Additionally, the company discussed new revenue streams from mines that began production in 2024, strategic royalty acquisitions, and the outlook for 2025, indicating a stable guidance range similar to 2024.Royal Gold Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Royal Gold Announces New Executive Agreements for Stability
Positive
Mar 21, 2025
On March 17, 2025, Royal Gold, Inc. announced new employment and restrictive covenants agreements with key executives, including the President and CEO, CFO, and Senior Vice Presidents. These agreements, replacing previous ones, outline salary structures, participation in incentive programs, and severance terms, while also imposing non-compete clauses for 12 months post-employment. The move is aimed at ensuring leadership stability and aligning executive incentives with company performance, potentially impacting the company’s operational continuity and stakeholder confidence.
Business Operations and StrategyFinancial Disclosures
Royal Gold Releases 2025 Financial Guidance Overview
Neutral
Mar 13, 2025
On March 13, 2025, Royal Gold, Inc. announced its guidance for the 2025 calendar year, detailing expected sales volumes for gold, silver, copper, and other metals, as well as projections for depletion, depreciation, and amortization expenses, and effective tax rates. The company anticipates that gold, silver, and copper will provide the majority of its revenue, with sales volumes expected to be split between the first and second halves of the year. Key assumptions include a lag in gold deliveries from Mount Milligan, ongoing ramp-up at the Pueblo Viejo mine, and increased production at Andacollo due to improved water availability. The guidance reflects adjustments based on management’s experience and forecasts from operating partners, with no new acquisitions factored into the projections.
Executive/Board ChangesShareholder Meetings
Kevin McArthur Resigns from Royal Gold Board
Neutral
Feb 20, 2025
Kevin McArthur has announced his resignation from Royal Gold, Inc.’s Board of Directors, effective at the conclusion of the company’s annual stockholders meeting on May 22, 2025, as he prepares to take on the role of chairman of the board at First Quantum Minerals Ltd on May 8, 2025. Royal Gold’s Board of Directors will start a search to find a replacement for McArthur, highlighting the company’s focus on maintaining strong leadership amid this transition.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.