Last week, you might have seen that Equinox Gold Corp. (TSE:EQX) released its second-quarter result to the market. The early response was not positive, with shares down 5.0% to CA$6.83 in the past week. Revenues of US$269m missed forecasts by 14%, but Equinox Gold managed to deliver a surprise (statutory) profit, with earnings per share of US$0.61 a decent improvement on the loss that the analysts were predicting. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Equinox Gold

Taking into account the latest results, the current consensus from Equinox Gold's seven analysts is for revenues of US$1.54b in 2024. This would reflect a huge 41% increase on its revenue over the past 12 months. Per-share earnings are expected to bounce 53% to US$0.88. In the lead-up to this report, the analysts had been modelling revenues of US$1.62b and earnings per share (EPS) of US$0.26 in 2024. While revenue forecasts have been revised downwards, the analysts look to have become more optimistic on the company's cost base, given the great increase in to the earnings per share numbers.

The consensus has made no major changes to the price target of CA$10.31, suggesting the forecast improvement in earnings is expected to offset the decline in revenues next year. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Equinox Gold at CA$12.72 per share, while the most bearish prices it at CA$7.75. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Equinox Gold's rate of growth is expected to accelerate meaningfully, with the forecast 99% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 21% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 13% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Equinox Gold is expected to grow much faster than its industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Equinox Gold following these results. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Still, earnings are more important to the intrinsic value of the business. The consensus price target held steady at CA$10.31, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Equinox Gold going out to 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 3 warning signs for Equinox Gold (1 is a bit unpleasant!) that we have uncovered.

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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.