Value
9.7/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 9.9 |
| P/S | 8.9 |
| EV/EBITDA | 9.7 |
| Fwd P/E | 9.6 |
| PEG | 10.0 |
- ▸Forward P/E: 8.1x
- ▸PEG: 0.04
- ▸Attractively valued
CGAU · Why this verdict
Why Centerra Gold (CGAU) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score6.9/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Revenue and earnings are growing at roughly 62% year-over-year — among the strongest growth rates in its sector — and the company screens near the top of its peer group on valuation relative to this growth, with a forward price-to-earnings of 8.2x and a PEG ratio of 0.04. Growth breakdown | Revenue growth stays above 20% year-over-year for at least 2 of the next 4 reported quarters. | →Stable |
| CounterGrowth at 62% is likely amplified by a favorable commodity price environment; if gold prices moderate, underlying volume and cost dynamics may produce a sharp deceleration that a low P/E multiple will not buffer. | ||
The stock has already moved past its analyst-consensus-based price target, leaving roughly 3.8% of headroom to the $17.59 resistance level and a risk/reward of 0.54-to-1 — the potential downside to the stop outweighs the available upside by nearly two-to-one. Price targets | This pillar is falsified when the stock establishes new highs above $18.00 with a fresh reward-to-risk greater than 1.5-to-1 from that base. | →Stable |
| CounterA recent extreme gap-up of 6% on strong volume signals momentum and potential for continued price extension beyond resistance if gold prices and earnings remain supportive. | ||
The company has beaten consensus estimates in each of the last four quarters with an average upside surprise of roughly 23% — a wide and accelerating margin that includes a 43% beat in the quarter ended August 2025 — indicating significant under-promise and over-deliver discipline relative to analyst expectations. Earnings | Average quarterly EPS surprise stays above 10% and the beat streak extends through the next two reported quarters. | →Stable |
| CounterBeat streaks of this magnitude in the mining sector can reflect favorable spot price tailwinds rather than operational outperformance; if commodity prices retreat, the beats may revert to the single-digit range or turn to misses without a fundamental change in the business. | ||
Return on equity of 34%, net margins of 40%, and a Piotroski financial strength score of 7 out of 9 place this company among the higher-quality operators in its peer group — a combination that supports the bull case for long-term compounding. Quality breakdown | ROE stays above 20% and net margin stays above 30% in each of the next two reported quarters. | →Stable |
| CounterThe peer-relative quality advantage is tempered by limited analyst coverage (two analysts), which means the quality assessment carries dampened signal confidence and may not hold up as coverage broadens and scrutiny deepens. | ||
Despite strong reported earnings and margins, free cash flow is running at effectively 0% of net income — flagged as an earnings quality red flag — meaning the company is not converting its accounting profits into cash, which limits financial flexibility and raises questions about the sustainability of the earnings. Quality breakdown | This pillar is falsified when free cash flow conversion rises above 50% of net income in any reported quarter, demonstrating that the gap between accounting earnings and cash generation is closing. | →Stable |
| CounterMining companies routinely show compressed cash conversion during expansion phases as capital expenditures temporarily depress free cash flow; the Piotroski score of 7/9 and strong balance sheet (current ratio noted as strong) suggest the gap may be a short-term capex-cycle effect. | ||
Revenue and earnings are growing at roughly 62% year-over-year — among the strongest growth rates in its sector — and the company screens near the top of its peer group on valuation relative to this growth, with a forward price-to-earnings of 8.2x and a PEG ratio of 0.04.
→StableGrowth breakdown
- Expectation
- Revenue growth stays above 20% year-over-year for at least 2 of the next 4 reported quarters.
CounterGrowth at 62% is likely amplified by a favorable commodity price environment; if gold prices moderate, underlying volume and cost dynamics may produce a sharp deceleration that a low P/E multiple will not buffer.
The stock has already moved past its analyst-consensus-based price target, leaving roughly 3.8% of headroom to the $17.59 resistance level and a risk/reward of 0.54-to-1 — the potential downside to the stop outweighs the available upside by nearly two-to-one.
→StablePrice targets
- Expectation
- This pillar is falsified when the stock establishes new highs above $18.00 with a fresh reward-to-risk greater than 1.5-to-1 from that base.
CounterA recent extreme gap-up of 6% on strong volume signals momentum and potential for continued price extension beyond resistance if gold prices and earnings remain supportive.
The company has beaten consensus estimates in each of the last four quarters with an average upside surprise of roughly 23% — a wide and accelerating margin that includes a 43% beat in the quarter ended August 2025 — indicating significant under-promise and over-deliver discipline relative to analyst expectations.
→StableEarnings
- Expectation
- Average quarterly EPS surprise stays above 10% and the beat streak extends through the next two reported quarters.
CounterBeat streaks of this magnitude in the mining sector can reflect favorable spot price tailwinds rather than operational outperformance; if commodity prices retreat, the beats may revert to the single-digit range or turn to misses without a fundamental change in the business.
Return on equity of 34%, net margins of 40%, and a Piotroski financial strength score of 7 out of 9 place this company among the higher-quality operators in its peer group — a combination that supports the bull case for long-term compounding.
→StableQuality breakdown
- Expectation
- ROE stays above 20% and net margin stays above 30% in each of the next two reported quarters.
CounterThe peer-relative quality advantage is tempered by limited analyst coverage (two analysts), which means the quality assessment carries dampened signal confidence and may not hold up as coverage broadens and scrutiny deepens.
Despite strong reported earnings and margins, free cash flow is running at effectively 0% of net income — flagged as an earnings quality red flag — meaning the company is not converting its accounting profits into cash, which limits financial flexibility and raises questions about the sustainability of the earnings.
→StableQuality breakdown
- Expectation
- This pillar is falsified when free cash flow conversion rises above 50% of net income in any reported quarter, demonstrating that the gap between accounting earnings and cash generation is closing.
CounterMining companies routinely show compressed cash conversion during expansion phases as capital expenditures temporarily depress free cash flow; the Piotroski score of 7/9 and strong balance sheet (current ratio noted as strong) suggest the gap may be a short-term capex-cycle effect.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Centerra Gold combines exceptional earnings execution — four straight beats averaging 22.7% upside surprise — with 62% revenue growth and strong underlying business quality, but the stock has already exceeded its price target and free cash flow is not converting from reported earnings, leaving the risk/reward unfavorable at current levels.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
7.4/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 10.0 |
| Gross margin | 4.8 |
| Op margin | 9.0 |
| Net margin | 10.0 |
| Current ratio | 8.2 |
| FCF quality | 0.0 |
| Moat | 6.8 |
| Piotroski F | 7.8 |
- ▸Excellent ROE: 34%
- ▸Strong margins: 40%
- ▸Earnings quality RED FLAG: 0% FCF/NI
- ▸Strong Piotroski F-Score: 7/9
Growth
10.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
| EPS growth | 10.0 |
- ▸Strong growth: 62% YoY
Momentum
4.7/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 6.8 |
| OBV | 1.0 |
| MA position | 7.0 |
| Volume | 3.4 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.9 |
| Price target | 6.0 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (2.0) — signal dampened
Insider
5.0/10data confidence 50%Peer rank
5.5/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 9.1 |
| quality rank | 7.6 |
| growth rank | 2.2 |
- ▸Attractive P/E vs peers
Technical
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 3.5 |
| support resistance | 4.9 |
| 52w position | 5.7 |
| gap | 4.0 |
Risk (lower is worse)
2.6/10data confidence 100%| Component | Sub-score |
|---|---|
| days to cover | 5.7 |
| volatility | 0.0 |
| put call | 1.9 |
| implied vol | 0.2 |
| beta | 4.8 |
| debt equity | 2.9 |
- ▸Elevated put/call: 1.71
- ▸High IV: 79%
Catalyst
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 5.2 |
- ▸Perfect beat streak: 4Q
- ▸Dividend: 121.0%
How the verdict was assembled
Engine trigger
Extreme risk factors.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (7)
- MOMENTUM:4.7>=4.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:24d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.8=NEGATIVE
Warning (1)
- MOMENTUM:4.7<5.5 (soft — BUY_NOW allowed but watch)
Reward-to-Risk
-0.79
Upside
-9.0%
Downside
11.4%
Sizing output
AVOID
SetupRange Bound — RSI 57 mid-range, Bollinger mid-band
EdgeCatalyst-Driven — Earnings in 24d with 4/4 beat streak
SuitabilityAggressive — Beta 1.56>1.3, MCap $3.3B<$5B
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Growth at 10.0 could not lift the engine output above the verdict floor. Failed gate signal: ASYMMETRY:-0.8=NEGATIVE.
The strongest dimensions are Growth at 10.0, Value at 9.7, and Quality at 7.4; the weakest are Risk (lower is worse) at 2.6, Technical at 4.5, and Momentum at 4.7. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -0.79 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Exceptional Earnings Beat Record
Trip ifAverage EPS surprise falls below 5% for 2 consecutive quarters.
- P2High Quality Business Metrics
Trip ifNet margin compresses below 25% for 2 consecutive reported quarters.
- P3Strong Revenue Earnings Growth
Trip ifRevenue growth falls below 20% year-over-year for 2 consecutive quarters.
- P4Free Cash Flow Earnings Gap
Trip ifFree cash flow conversion rises above 50% of net income in any reported quarter.
- P5Target Reached Unfavorable Setup
Trip ifStock breaks above $18.00 establishing a new reward-to-risk greater than 1.5-to-1 from that base.