Pretium Resources Inc. (TSE:PVG) investors will be delighted, with the company turning in some strong numbers with its latest results. It was overall a positive result, with revenues beating expectations by 5.9% to hit US$154m. Pretium Resources reported statutory earnings per share (EPS) US$0.16, which was a notable 19% above what the analysts had forecast. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Pretium Resources

After the latest results, the seven analysts covering Pretium Resources are now predicting revenues of US$633.6m in 2021. If met, this would reflect a credible 2.3% improvement in sales compared to the last 12 months. Earnings are expected to improve, with Pretium Resources forecast to report a statutory profit of US$0.70 per share. Before this earnings report, the analysts had been forecasting revenues of US$624.9m and earnings per share (EPS) of US$0.64 in 2021. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

There's been no major changes to the consensus price target of CA$15.29, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. 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. There are some variant perceptions on Pretium Resources, with the most bullish analyst valuing it at CA$18.50 and the most bearish at CA$13.50 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Pretium Resources shareholders.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Pretium Resources' revenue growth will slow down substantially, with revenues to the end of 2021 expected to display 4.7% growth on an annualised basis. This is compared to a historical growth rate of 15% over the past three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 3.5% annually. So it's pretty clear that, while Pretium Resources' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Pretium Resources' earnings potential next year. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations – and our data suggests that revenues are 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 Pretium Resources. Long-term earnings power is much more important than next year's profits. We have estimates – from multiple Pretium Resources analysts – going out to 2023, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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.

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