CGAU Skyrockets 116% in 6 months: Buy, Hold or Sell the Stock?

Core Insights - Centerra Gold Inc. (CGAU) has experienced a significant stock increase of 116.2% over the past six months, outperforming the Zacks Mining-Gold industry which rose by 74.9% and the S&P 500 which saw a modest increase of 13.7% [1] - The stock surge is attributed to stronger gold prices and improved operational performance, particularly from the Mount Milligan mine and effective cost management [1] Financial Performance - In Q3 2025, Centerra Gold reported revenue of $395.2 million, marking a year-over-year increase of approximately 22%, driven by robust gold and copper output [6][7] - The company produced 81,773 ounces of gold, with contributions of 49,234 ounces from Öksüt and 32,539 ounces from Mount Milligan, alongside 13.4 million pounds of copper [7] - Higher realized prices of around $3,178 per ounce for gold and $3.73 per pound for copper contributed to improved margins [8] - Centerra Gold generated $161.7 million in cash from operating activities, resulting in free cash flow of $98.7 million, showcasing its ability to convert revenue into liquidity [10] Operational Strengths - The company maintained stable mining and processing rates at both sites, benefitting from improved ore grades at Öksüt and effective plant management at Mount Milligan [9] - The operational strengths supported year-over-year revenue growth and highlighted the resilience of Centerra Gold's production platform [9] Financial Position - At the end of Q3, Centerra Gold held a cash balance of approximately $561.8 million and an undrawn credit facility of $400 million, providing total liquidity of nearly $962 million [11] - The disciplined capital allocation approach, combined with strong cash generation, allows the company to meet operational needs while investing in long-term growth [13] Project Developments - Centerra Gold has made progress on several strategic growth projects, including a Pre-Feasibility Study for the Mount Milligan mine, extending its life to 2045 and enhancing mineral reserves [14] - The company is advancing the Goldfield project in Nevada, which has shown attractive economics, and is moving forward with the restart of the Thompson Creek mine, targeting first production in the second half of 2027 [16] Earnings Estimates - The Zacks Consensus Estimate for CGAU's fiscal 2025 earnings is currently at 99 cents per share, indicating a year-over-year growth of 39.44%, with the estimate for 2026 at $1.27 per share, implying 28.1% growth [18][19] Valuation Metrics - CGAU is trading at a forward 12-month price-to-earnings multiple of 12.19X, which is above the peer group average of 11.19X [21] - The company and Galiano Gold currently have a Value Score of A, while Royal Gold has a score of E [23]