Should You Buy Idaho Strategic (IDR) Stock Ahead of Q3 Earnings?

Core Viewpoint - Idaho Strategic Resources (IDR) is anticipated to show significant year-over-year improvements in both revenue and earnings for the third quarter of 2024, driven by rising gold prices and increased production levels [1][9]. Financial Performance - The Zacks Consensus Estimate for IDR's earnings in Q3 2024 is 21 cents per share, a substantial increase from 3 cents in Q3 2023, reflecting a 600% improvement [2]. - Revenue estimates for IDR are projected at $7.40 million, indicating a 124% increase compared to the same quarter last year [3]. Earnings Surprise History - IDR has beaten the Zacks Consensus Estimates in three of the last four quarters, with an average earnings surprise of 116.55% [4][5]. Production and Market Factors - In the first half of 2024, IDR produced 6,019 ounces of gold, a 55% increase from 3,877 ounces in the first half of 2023, contributing to the positive outlook for Q3 [8]. - Average gold prices in Q3 2024 were $2,491 per ounce, up 29% from the previous year, influenced by expectations of interest rate cuts and geopolitical tensions [9]. Cost and Efficiency - Increased exploration expenses are expected due to drilling activities at the Golden Chest Mine, but higher production levels are likely to result in lower cash costs, enhancing overall earnings [10]. Stock Performance - IDR shares have surged 220.9% over the past year, outperforming the industry average of 48.4% and major gold miners like Barrick Gold and Newmont [11]. - The stock is currently trading at a forward sales multiple of 8.09, significantly above the industry average of 2.97 [12]. Investment Thesis - IDR is well-positioned for growth with strong cash flow and low debt, allowing for investments in existing mines and exploration of new opportunities, including the recent discovery of the Red Star Vein [14]. - The rising demand for rare earth elements (REEs) presents additional growth potential, as the U.S. focuses on developing domestic REE capabilities [16]. Conclusion - IDR is expected to deliver solid year-over-year improvements in revenues and earnings, supported by favorable gold prices and production levels, making it an attractive investment despite its high valuation [17].