On Thursday, H.C. Wainwright adjusted its outlook on Tanzanian Gold Corp. (NYSE:TRX) shares, reducing the price target to $1.00 from the previous $1.50, while maintaining a Buy rating on the stock. According to InvestingPro data, analyst targets currently range from $0.85 to $1.75, with a strong consensus recommendation of 1.67 (Buy). The adjustment follows TRX Gold's announcement of its financial performance for the first quarter of fiscal year 2025.
TRX Gold reported its FY1Q25 production results, which included $12.5 million in revenue and net income of $2.1 million, equating to $0.00 per share. These figures represent a notable improvement over the same quarter in the previous fiscal year, which saw revenues of $9.4 million and a marginal net loss of $39,000, or ($0.00) per share.
InvestingPro analysis shows the company maintains a healthy gross profit margin of 49% and has achieved profitability over the last twelve months, with several more key performance indicators available to subscribers.
The company's revenue growth of 33% year-over-year was primarily attributed to the average realized gold price of $2,653 per ounce, marking a 37% increase from the previous year. However, gold production saw a slight decline, with the company pouring 4,841 ounces of gold, a 2% decrease year-over-year. The company's trailing twelve-month revenue stands at $44.3 million, with a solid year-over-year growth rate of 16.5%.
TRX Gold's total costs of sales amounted to $7.7 million, resulting in a gross profit of $4.8 million and a gross profit margin of 39%. The company's production for the quarter was in line with planned mine sequencing, which involved processing lower-grade ore during a stripping campaign in preparation for higher-grade production expected in the second half of fiscal year 2025.
The management of TRX Gold anticipates that gold production in FY2025 will surpass the levels achieved in FY2024. This projection is based on the expectation of a full year of operations from the company's expanded processing plant, which boasts a capacity of 2,000 tonnes per day. Additionally, cash costs are expected to remain largely consistent with the previous year's figures.
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