WEBULL

Gold Royalty (NYSEAM:GROY): Revisiting Valuation After $90 Million Follow-On Equity Raise and Royalty Expansion Plans

Simply Wall St · 1d ago

Gold Royalty (NYSEAM:GROY) just closed a $90 million follow on equity offering at around $4 a share, a sizable capital raise that immediately reshapes the balance sheet and future deal making capacity.

See our latest analysis for Gold Royalty.

That capital raise caps a hectic stretch that also included underwriter changes and a special call about acquiring a cash flowing gold and copper royalty in Brazil. The stock’s 230.65% year to date share price return alongside a 222.83% one year total shareholder return suggests strong but potentially maturing momentum at the current $4.10 share price.

If this kind of deal making has you thinking more broadly about opportunity, it could be worth scanning fast growing stocks with high insider ownership as a way to spot other fast moving names benefiting from aligned insiders and growth tailwinds.

With fresh cash, rapid revenue growth and a stock trading at a steep premium to last year’s levels but still below analyst targets, investors now face a key question: Is Gold Royalty undervalued, or has the market already priced in its future growth?

Most Popular Narrative Narrative: 14.3% Undervalued

With Gold Royalty last closing at $4.10 versus a narrative fair value near $4.79, the story leans bullish on upside if execution matches expectations.

The high fixed cost structure of the business and increasing scale from newly producing royalties will result in meaningful operating leverage, translating incremental top line growth into disproportionately higher net margins and improving overall profitability. Pipeline of mature and brownfield projects, mainly with experienced and well capitalized operators in attractive jurisdictions, underpins stable, recurring cash flow increases and supports future capital returns to shareholders, strengthening long term per share earnings growth.

Read the complete narrative.

Want to see why this outlook prices in rapid revenue expansion, sharply improving margins, and a future earnings multiple usually reserved for market darlings? The narrative reveals the specific growth runway, profit swing, and valuation bridge that attempt to justify paying up today for tomorrow’s cash flows.

Result: Fair Value of $4.79 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, setbacks at key mines or a sustained pullback in gold prices could quickly undermine those optimistic cash flow and valuation assumptions.

Find out about the key risks to this Gold Royalty narrative.

Build Your Own Gold Royalty Narrative

If you see the story differently or simply prefer running your own numbers, you can build a personalized view in just minutes, Do it your way.

A great starting point for your Gold Royalty research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

Looking for more investment ideas?

Before you move on, set yourself up for the next big win by using targeted screeners that surface opportunities most investors overlook.

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.