Last week saw the newest quarterly earnings release from Equinox Gold Corp. (TSE:EQX), an important milestone in the company's journey to build a stronger business. Revenues of US$272m missed analyst estimates by a little bit, but statutory earnings beat expectations by an impressive , coming in at US$0.02 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. 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 Equinox Gold  earnings-and-revenue-growth

Taking into account the latest results, the most recent consensus for Equinox Gold from seven analysts is for revenues of US$1.14b in 2023. If met, it would imply a solid 13% increase on its revenue over the past 12 months. Earnings are expected to tip over into lossmaking territory, with the analysts forecasting statutory losses of -US$0.045 per share in 2023. Before this earnings announcement, the analysts had been modelling revenues of US$1.25b and losses of US$0.042 per share in 2023. So it's pretty clear consensus is more negative on Equinox Gold after the new consensus numbers; while the analysts trimmed their revenue estimates, they also administered a modest increase to per-share loss expectations.

There was no major change to the consensus price target of CA$8.09, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts. 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 Equinox Gold analyst has a price target of CA$9.53 per share, while the most pessimistic values it at CA$5.09. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.



Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Equinox Gold's revenue growth will slow down substantially, with revenues to the end of 2023 expected to display 28% growth on an annualised basis. This is compared to a historical growth rate of 41% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 14% per year. Even after the forecast slowdown in growth, it seems obvious that Equinox Gold is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Equinox Gold. They also downgraded Equinox Gold's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Equinox Gold. Long-term earnings power is much more important than next year's profits. We have forecasts for Equinox Gold going out to 2025, and you can see them free on our platform here.

You still need to take note of risks, for example - Equinox Gold has  2 warning signs  we think you should be aware 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.