Value
9.3/10data confidence 67%| Component | Sub-score |
|---|---|
| P/E | 9.2 |
| P/S | 8.9 |
| EV/EBITDA | 9.5 |
| Fwd P/E | 9.3 |
- ▸Forward P/E: 9.7x
- ▸Attractively valued
CGAU · Why this verdict
Why Centerra Gold (CGAU) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. People who build TrendMatrix, or entities they control, may hold positions, long or short, in securities it covers, and may trade them at any time. Positions are not disclosed individually. Verdicts are generated by an automated model applied by the same rules to every covered stock, and are not adjusted for any position held by the people who build TrendMatrix. We do not accept payment from issuers for coverage.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
VerdictHOLD
Overall score6.0/10
ConfidenceMEDIUM
MacroRISK_OFF
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.
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. | ↓Deteriorating |
| 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. | ↓Deteriorating |
| 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. | ↓Deteriorating |
| 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. | ↓Deteriorating |
| 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.
↓DeterioratingGrowth 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.
↓DeterioratingEarnings
- 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.
↓DeterioratingQuality 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.
↓DeterioratingQuality 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.
Per-dimension breakdown
Quality
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 6.9 |
| ROA | 10.0 |
| Gross margin | 4.7 |
| Op margin | 8.9 |
| Net margin | 10.0 |
| Current ratio | 7.2 |
| FCF quality | 0.0 |
| Moat | 8.2 |
| Piotroski F | 7.8 |
- ▸Strong margins: 24%
- ▸Earnings quality RED FLAG: -6% FCF/NI
- ▸Wide economic moat
- ▸Compounder quality: strong returns + growth
Growth
4.5/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 9.1 |
| EPS growth | 0.0 |
- ▸Strong growth: 27% YoY
Momentum
4.7/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 3.1 |
| OBV | 1.0 |
| MA position | 7.0 |
| Volume | 6.7 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.0 |
| Analyst rating | 5.6 |
| Price target | 1.8 |
- ▸Light analyst coverage (1.0) — signal dampened
- ▸Below analyst target
- ▸Contrarian divergence: +2.0 (bearish sentiment + deep value + high quality)
Insider
5.0/10data confidence 50%Peer rank
5.4/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 6.9 |
| quality rank | 4.2 |
| growth rank | 2.9 |
Technical
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 4.6 |
| support resistance | 3.8 |
| 52w position | 7.5 |
| gap | 4.0 |
Risk (lower is worse)
4.4/10data confidence 100%| Component | Sub-score |
|---|---|
| days to cover | 6.3 |
| volatility | 0.8 |
| put call | 0.0 |
| implied vol | 4.9 |
| beta | 4.6 |
| debt equity | 9.9 |
- ▸Elevated put/call: 4.75
Catalyst
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 6.0 |
| dividend safety | 4.3 |
| news activity | 5.0 |
- ▸Perfect beat streak: 4Q
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (6)
- MOMENTUM:4.7>=4.5
- INSIDER:OK
- 8K:CLEAN
- EARNINGS_PROXIMITY:106d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-3.6=NEGATIVE
Warning (1)
- MOMENTUM:4.7<5.5 (soft — BUY_NOW allowed but watch)
Reward-to-Risk
-3.62
Upside
-36.5%
Downside
10.1%
Sizing output
AVOID
SetupRange Bound — RSI 46 mid-range, Bollinger mid-band
EdgeSector Rotation — Basic Materials sector out of favor, value=9.3
SuitabilityAggressive — Beta 1.62>1.3, MCap $3.8B<$5B
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:4.7>=4.5. Top dim: Value at 9.3; weakest: Risk (lower is worse) at 4.4. No conviction either direction.
The strongest dimensions are Value at 9.3, Quality at 7.1, and Sentiment at 6.3; the weakest are Risk (lower is worse) at 4.4, Growth 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 -3.62 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.