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Sandstorm Gold (TSE:SSL)
TSX:SSL
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Sandstorm Gold
(TSX:SSL)
70Outperform
Positive Factors
Production Forecast
Sandstorm increased its long-term production forecast to ~150koz GEOs in 2030, indicating strong future growth potential.
Share Repurchase
Sandstorm remains active on its NCIB, and with the company signaling an increasing rate of share repurchases in 2025.
Negative Factors
Earnings Performance
Sandstorm reported Q4/24 adjusted EPS that was a bit below consensus and estimate.
Sandstorm Gold (SSL) vs. S&P 500 (SPY)
Market Cap
$2.69B
Dividend Yield0.91%
Average Volume (3M)447.88K
Price to Earnings (P/E)138.1
Beta (1Y)0.96
Revenue Growth0.80%
EPS Growth137.87%
CountryCA
Employees29
SectorBasic Materials
Sector Strength64
IndustryMining
Share Statistics
EPS (TTM)0.07
Shares Outstanding296,139,530
10 Day Avg. Volume470,982
30 Day Avg. Volume447,885
Financial Highlights & Ratios
PEG Ratio0.41
Price to Book (P/B)N/A
Price to Sales (P/S)10.62
Price to Cash Flow (P/CF)13.00
P/FCF Ratio12.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$11.30Price Target Upside21.54% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering9
Sandstorm Gold Business Overview & Revenue Model
Company DescriptionSandstorm Gold Ltd. is a gold royalty company based in Canada that provides financing to gold mining companies. It primarily operates in the metals and mining industry. The company focuses on acquiring gold and other precious metal purchase agreements, and it holds a diversified portfolio of over 200 royalties. Through its royalty and streaming model, Sandstorm Gold offers a non-dilutive form of capital to mining operators, helping them fund their operations while providing Sandstorm with exposure to future gold production.
How the Company Makes MoneySandstorm Gold generates revenue primarily through its royalty and streaming agreements with mining companies. In these agreements, Sandstorm provides upfront capital to miners in exchange for the right to purchase a percentage of the gold or other metals produced at a fixed price per ounce. This allows Sandstorm to benefit from the production of mines without being directly involved in the operational risks of mining. The key revenue streams include cash flows from royalty agreements, where Sandstorm receives a percentage of the revenue from the mine's production, and streaming agreements, where it purchases metal at a predetermined price. Significant factors contributing to its earnings include the price of gold and other metals, production volumes from its partner mines, and strategic acquisitions of new royalty and streaming agreements.
Sandstorm Gold Financial Statement Overview
Summary
Sandstorm Gold exhibits strong profitability and cash flow metrics, underpinned by a solid balance sheet structure. The company maintains a high equity ratio and a healthy debt profile, ensuring stability. Despite a slight decline in revenue, the overall financial health remains robust, with excellent cash flow conversion and profitability margins.Income Statement
The company shows strong profitability with a substantial Gross Profit Margin of 51% and an EBIT Margin of 45.8% for TTM. However, there is a slight decrease in Total Revenue from last year's annual report, indicating a negative revenue growth rate. The Net Profit Margin is healthy at 20.4%, enhancing its profitability outlook.75
Positive
Balance Sheet
Sandstorm Gold has a strong Equity Ratio of 76.2%, indicating high financial stability. The Debt-to-Equity Ratio is manageable at 0.26, reflecting a conservative capital structure. Return on Equity stands at 2.5%, which is relatively low, suggesting limited efficiency in generating returns on shareholder equity.70
Positive
Cash Flow
The company demonstrates robust cash flow generation with a Free Cash Flow to Net Income Ratio of 3.44, highlighting substantial cash conversion. The Operating Cash Flow to Net Income Ratio is impressive at 3.89, indicating strong cash flow relative to earnings. However, Free Cash Flow Growth is slightly negative, requiring attention.80
Positive
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 173.38M | 179.64M | 148.73M | 114.86M | 93.03M | 89.43M |
| Gross Profit | |||||
| 88.48M | 150.81M | 65.59M | 62.31M | 45.85M | 33.30M |
| EBIT | |||||
| 79.39M | 136.43M | 41.95M | 43.81M | 31.77M | 19.80M |
| EBITDA | |||||
| 127.65M | 162.35M | 102.19M | 83.17M | 59.99M | 56.31M |
| Net Income Common Stockholders | |||||
| 35.47M | 41.72M | 78.36M | 27.62M | 13.82M | 16.40M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 19.83M | 33.40M | 10.80M | 21.17M | 115.63M | 17.77M |
| Total Assets | |||||
| 588.89M | 1.93B | 1.97B | 620.86M | 649.92M | 623.17M |
| Total Debt | |||||
| 510.00K | 435.00M | 499.55M | 2.58M | 2.87M | 48.41M |
| Net Debt | |||||
| -5.38M | 430.00M | 492.52M | -13.59M | -110.91M | 41.44M |
| Total Liabilities | |||||
| 5.49M | 477.44M | 533.37M | 28.22M | 11.78M | 52.28M |
| Stockholders Equity | |||||
| 583.40M | 1.43B | 1.41B | 592.64M | 638.14M | 570.90M |
| Cash Flow | Free Cash Flow | ||||
| 122.16M | 131.81M | -513.87M | -71.56M | 62.14M | -3.95M |
| Operating Cash Flow | |||||
| 138.00M | 152.75M | 106.92M | 81.14M | 65.62M | 57.34M |
| Investing Cash Flow | |||||
| 1.03M | -22.18M | -612.67M | -143.91M | 33.68M | -65.03M |
| Financing Cash Flow | |||||
| -137.68M | -131.93M | 497.56M | -34.22M | 7.69M | 8.75M |
Sandstorm Gold Technical Analysis
Positive
9.30
Price Trends
8.65
Positive
8.38
Positive
8.04
Positive
Market Momentum
0.11
Positive
59.08
Neutral
68.01
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:SSL, the sentiment is Positive. The current price of 9.3 is above the 20-day moving average (MA) of 8.97, above the 50-day MA of 8.65, and above the 200-day MA of 8.04, indicating a bullish trend. The MACD of 0.11 indicates Positive momentum. The RSI at 59.08 is Neutral, neither overbought nor oversold. The STOCH value of 68.01 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:SSL.
Sandstorm 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 |
|---|---|---|---|---|---|---|---|
80 Outperform | $73.04B | 27.96 | 9.42% | 1.58% | 26.99% | -6.63% | |
79 Outperform | C$2.24B | 28.03 | 17.33% | ― | 56.15% | ― | |
70 Outperform | $2.69B | 138.15 | 1.00% | 0.91% | 0.80% | 137.87% | |
67 Neutral | $40.46B | 53.44 | 9.38% | 0.98% | -10.48% | -189.87% | |
56 Neutral | $5.13B | 229.60 | 1.33% | 0.98% | 1.62% | -232.31% | |
47 Neutral | $2.61B | -3.78 | -28.62% | 3.34% | 2.54% | -30.57% |
* Basic Materials Sector Average
Performance Comparison
TSE:SSL
Sandstorm Gold
9.30
2.76
42.14%
TSE:OR
Osisko Gold Royalties
28.02
6.77
31.88%
TSE:FNV
Franco-Nevada
216.66
63.57
41.52%
TSE:AEM
Agnico Eagle
148.23
74.43
100.85%
TSE:WDO
Wesdome Gold Mines
15.60
5.90
60.82%
Sandstorm Gold Earnings Call Summary
Earnings Call Date: Feb 18, 2025 | % Change Since: 1.53% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Neutral
The earnings call for Sandstorm Gold Royalties presented a mixed picture. The company showcased strong revenue and cash flow, strategic debt reduction, and promising long-term growth prospects. However, challenges such as missing internal production targets, declining gold equivalent ounces, and stream-related issues were also highlighted. Despite these challenges, the company demonstrated a strategic approach to managing its balance sheet and capital allocation, including a focus on share buybacks.Highlights
Strong Q4 Revenue and Operating Cash Flow
Sandstorm Gold Royalties reported strong Q4 revenue of $47 million and operating cash flow of $36 million, driven by gold equivalent production of 17,721 ounces.
Strategic Guidance and Long-Term Outlook
The company provided conservative guidance for 2025 of 65,000 to 80,000 ounces to maintain credibility and anticipate potential market fluctuations. Long-term production is expected to increase to over 150,000 gold equivalent ounces per year over the next five years.
Debt Reduction and Balance Sheet Improvement
Sandstorm reduced its debt from $640 million to $340 million, with expectations to drop below $300 million by the end of Q3 2025. The company has a strong balance sheet and plans to prioritize share buybacks.
Record Margins and Cash Flows
Cash operating margins were approximately $2,100 per ounce, with cash flows from operating activities totaling $139 million in 2024.
Positive Progress on Growth Projects
Greenstone mine began production, contributing approximately 2,000 gold ounces in 2024. Production is expected to increase to 8,000 to 10,000 ounces per year. Other growth projects like MARA and Gualcamayo are on track for future contributions.
Lowlights
Missed Internal GEO Production Targets
Sandstorm missed its internal gold equivalent ounce production targets by 10,700 ounces in 2024, primarily due to soaring gold prices affecting silver and copper revenue conversions.
Decline in Attributable Gold Equivalent Ounces
There was a drop in attributable gold equivalent ounces sold from 97,000 ounces in 2023 to approximately 73,000 ounces in 2024.
Challenges with Vatukoula Stream
The Vatukoula stream faced non-performance issues, leading to a $14 million buyout option being pursued. The situation indicated operational insolvency at the mining level.
Bear Creek and America's Gold and Silver Issues
Bear Creek remains a concern due to potential financial instability, whereas America's Gold and Silver has recently stabilized with new management and capital.
Company Guidance
In the Sandstorm Gold Royalties' Annual 2024 Fourth Quarter Results Conference call, Nolan Watson, the CEO, provided guidance for 2025, highlighting several key metrics and strategic decisions. The company reported a strong Q4 with revenue of $47 million and operating cash flow of $36 million, driven by gold equivalent production of 17,721 ounces. Despite missing the 2024 internal gold equivalent ounces (GEO) production target by 10,700 ounces due to soaring gold prices, the company emphasized its conservative 2025 guidance of 65,000 to 80,000 ounces to avoid similar misses. With a strong balance sheet and reduced debt expected to fall below $300 million by mid-2025, Sandstorm plans to prioritize share buybacks, leveraging its cash flow and undervalued shares. The long-term outlook includes production growth to over 150,000 GEOs per year within the next five years, driven by projects like Greenstone, Platreef, and the MARA mine. This growth is expected to significantly increase cash flows, potentially reaching $260 million annually by 2030 at $2,600 gold prices.Sandstorm Gold Corporate Events
Sandstorm Gold Reports 2024 Revenue with Increased Margins
Jan 7, 2025
Sandstorm Gold Royalties reported its sales and revenue figures for 2024, revealing a decrease in annual gold equivalent ounces sold, from 97,245 in 2023 to 72,800 in 2024, along with a drop in revenue from $179.6 million to $176.3 million. Despite the dip in volume, the company achieved higher cash operating margins per ounce, indicating effective cost management and potentially improving profitability, which could impact its operations and stakeholder interests positively.
Sandstorm Gold Announces Key Project Developments
Nov 27, 2024
Sandstorm Gold Royalties has reported significant progress on its key projects, including the Robertson mine in Nevada and the Hod Maden project in Türkiye. The Robertson mine has received a crucial environmental permit, paving the way for potential production in 2027, while site preparations at the Hod Maden project continue to advance.
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.