RGLD Should I Buy
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Royal Gold Inc (RGLD) is a good buy for a beginner investor with a long-term strategy and $50,000-$100,000 available for investment. The company shows strong growth potential, favorable analyst sentiment, and hedge fund interest, despite some short-term financial challenges. The current pre-market price of $262.13 offers a reasonable entry point for long-term gains.
The technical indicators are mixed but lean slightly bullish. The MACD is positive and contracting, suggesting a potential upward trend. The RSI is neutral at 48.805, indicating no overbought or oversold conditions. Moving averages are bullish (SMA_5 > SMA_20 > SMA_200). Key support is at $255.204, and resistance is at $274.296. The stock is trading near its pivot level of $264.75, which could act as a balance point for further movement.
UBS initiated a Buy rating with a $325 price target, citing low-risk leverage to gold price increases and expected growth.
Hedge funds are significantly increasing their holdings, with a 1744.44% rise in buying activity over the last quarter.
The company is entering a growth phase with potential acquisitions and organic growth targets of 20% from 2026 to 2030.
Financial performance in Q4 2025 showed a decline in net income (-12.85% YoY), EPS (-28.83% YoY), and gross margin (-8.17% YoY), which may concern some investors.
Analyst ratings are mixed, with some firms maintaining Neutral or Underperform ratings due to valuation concerns.
In Q4 2025, revenue increased significantly by 85.29% YoY to $375.32M, indicating strong top-line growth. However, net income dropped by 12.85% YoY to $93.61M, and EPS fell by 28.83% YoY to $1.16. Gross margin also declined to 64.54%, down 8.17% YoY. These mixed results suggest strong revenue growth but challenges in profitability.
Analyst sentiment is cautiously optimistic. UBS initiated coverage with a Buy rating and a $325 price target, citing growth potential and low-risk leverage to gold prices. However, some analysts, like BofA, maintain Underperform ratings due to valuation concerns. Price targets range from $256 to $335, with a median target around $325 indicating upside potential.
