Equinox Gold Stock Trading Cheaper Than Industry: Should You Buy Now?

Valuation and Market Position - Equinox Gold Corp. (EQX) is currently trading at a forward price/earnings ratio of 6.54X, which represents a 51.2% discount to the Zacks Mining – Gold industry's average of 13.4X [1][5] - EQX's valuation is lower than key peers such as B2Gold Corp. (BTG), Eldorado Gold Corporation (EGO), and IAMGOLD Corporation (IAG), all of which have a Value Score of A [1][5] Technical Indicators - EQX stock broke out above its 50-day simple moving average (SMA) on May 30, 2025, and is currently trading above the 200-day SMA, indicating a bullish trend [2][3] Production Expansion and Growth Strategy - Equinox Gold is expanding production capacity and acquiring Calibre Mining Corp. to boost output beyond 1.2 million ounces annually [5][10] - The company has five producing mines and three expansion projects expected to add approximately 300,000 ounces of annual production in the coming years [8] - Greenstone mine is ramping up towards a full production target of 196,000 tons per day, expected to produce around 390,000 ounces of gold annually at full capacity [9] - The acquisition of Calibre includes the Valentine Gold Mine, which is anticipated to start production in Q3 2025, further enhancing EQX's asset base [10][11] Financial Performance and Cash Flow - EQX ended the first quarter with approximately $173 million in unrestricted cash and $65 million in an undrawn credit facility, indicating strong liquidity [15] - The company generated cash flow from operations of $73.3 million in the first quarter, supporting its growth projects [15] Gold Price Impact - Gold prices have increased by roughly 27% this year, driven by global trade tensions and central bank purchases, which are expected to enhance EQX's profitability [12][14] - Despite a decline from April 2025 highs, gold prices remain favorable, hovering above $3,300 per ounce, which is anticipated to boost EQX's cash flow generation [14] Cost Challenges - EQX's all-in-sustaining costs (AISC) rose to $2,065 per ounce, a 6% increase from the previous year, indicating operational cost inflation [16] - The suspension of operations at the Los Filos mine is expected to contribute to ongoing cost pressures, with approximately $35 million in charges anticipated in Q2 2025 [17] Stock Performance - EQX shares have gained 36% over the past year, underperforming the industry average of 51.7% but outperforming the S&P 500's rise of 11.2% [18] Earnings Estimates - Earnings estimates for EQX have been revised downward recently, but the Zacks Consensus Estimate for 2025 and 2026 implies year-over-year increases of 230% and 106%, respectively [21] Conclusion - With a strong expansion roadmap and an upcoming merger, EQX is positioned for growth, although high costs may pose challenges in the near term [22]