Assessing Royal Gold’s Value After Recent Portfolio Expansion and 40% Stock Surge

Wondering if Royal Gold is truly a hidden gem or already priced for perfection? You are not alone in trying to crack the code on its real value. The stock has surged an impressive 43.8% year-to-date and is up 40.0% over the last year, though it recently dipped 3.0% in the past month. Recent headlines have highlighted Royal Gold's expansion of its portfolio through high-profile streaming deals, bringing fresh attention to its growth prospects. Investors are also dissecting industry news on fluctuating commodity prices, wondering how these external shifts could impact the company going forward. Out of 6 valuation checks, Royal Gold scores 3, landing it right at the halfway mark. In a moment, we will break down exactly what this score means using the most common valuation approaches, but stick around because there is a smarter way to think about value that we will discuss at the end of the article.

Find out why Royal Gold's 40.0% return over the last year is lagging behind its peers.

Approach 1: Royal Gold Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model works by projecting a company's future cash flows and then discounting those amounts back to today's value, providing an estimate for what the business is truly worth right now. For Royal Gold, this method uses analyst forecasts and reasonable assumptions to estimate future cash generation.

Currently, Royal Gold generates Free Cash Flow (FCF) of $13.09 million. Analysts project strong growth ahead, with FCF expected to reach well over $1.2 billion by 2028. For years beyond that, projections are extrapolated, anticipating steady gains through 2035, all in the company's reporting currency of USD.

Based on these calculations, the DCF analysis pegs Royal Gold's intrinsic value at $287.35 per share. Given the current share price, this means the stock trades at a 32.7% discount to its estimated fair value. By this metric, Royal Gold appears solidly undervalued and may offer investors a significant margin of safety based on future cash flow potential.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Royal Gold is undervalued by 32.7%. Track this in your watchlist or portfolio, or discover 865 more undervalued stocks based on cash flows.RGLD Discounted Cash Flow as at Nov 2025

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Royal Gold.

Approach 2: Royal Gold Price vs Earnings

The Price-to-Earnings (PE) ratio is a reliable way to value profitable companies such as Royal Gold because it directly compares what investors are paying for each dollar of current earnings. Profitable, established companies are often best assessed using this multiple, as it incorporates both their current profitability and the market's expectations for future growth.

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Typically, a "normal" or "fair" PE ratio depends on factors like how quickly earnings are expected to grow and the level of risk in the business. Higher expected growth or lower risk justifies a higher PE, while lower growth or higher risk calls for a more modest multiple.

Royal Gold is currently trading at a PE ratio of 34x. For context, this is well above the Metals and Mining industry average of 24x, and it also exceeds the average of its closest publicly traded peers at 19x. At first glance, this might imply the stock is on the more expensive side relative to traditional benchmarks.

This is where Simply Wall St’s “Fair Ratio” comes in. The Fair Ratio, calculated here at 26x, weighs many additional company-specific factors beyond broad industry or peer averages, including Royal Gold’s earnings outlook, margins, market size and unique risks. This means it reflects a more complete valuation picture than simply lining up against other miners, making it more adaptive and insightful for investors.

Comparing Royal Gold’s current PE of 34x to its Fair Ratio of 26x, the stock does appear overvalued by this measure. In other words, it is trading above what would be justified by its underlying fundamentals.

Result: OVERVALUEDNasdaqGS:RGLD PE Ratio as at Nov 2025

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1370 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Royal Gold Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives. A Narrative is simply the story you believe about a company, your perspective on how its future will play out, including your assumptions for fair value, future revenue, earnings, and margins, all woven together in one easy-to-follow flow.

Narratives connect a company's real-world story to a financial forecast and, ultimately, to a fair value estimate. This approach makes investing more accessible and personal, allowing you to see not just what the numbers are, but why they make sense, and how they tie to your outlook for the business.

On Simply Wall St’s Community page, Narratives are used by millions of investors as a user-friendly tool to help clarify when a stock looks appealing based on your view. Just compare your Narrative-based Fair Value with the current price to decide if it’s time to buy, hold, or sell.

Since Narratives update automatically when new information like news or results is released, you always have the latest view tailored to your assumptions. For example, one Narrative for Royal Gold might focus on growth from new acquisitions and higher gold prices, leading to a Fair Value near $237 per share. Another might see challenges from rising debt and execution risks, setting Fair Value closer to $182 per share.

Do you think there's more to the story for Royal Gold? Head over to our Community to see what others are saying!NasdaqGS:RGLD Community Fair Values as at Nov 2025

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include RGLD.

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