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

Equinox Gold (EQX) presents a compelling valuation relative to its peers, trading at a forward P/E of 6.54x compared to the industry average of 13.4x, and is exhibiting bullish technical indicators. The company is pursuing growth through expansions at existing mines and the acquisition of Calibre Mining, which will add the Valentine Gold Mine to its portfolio, potentially creating a Canadian gold mining powerhouse. Despite rising all-in-sustaining costs in Q1 2025 and downward earnings estimate revisions, analysts suggest holding EQX, anticipating improved profitability from higher gold prices and increased production in the second half of 2025.

Analysis

Equinox Gold Corp. (EQX) presents a compelling investment case characterized by an attractive valuation, trading at a forward price-to-earnings ratio of 6.54x, a significant 51.2% discount to its industry peers, and exhibiting bullish technical signals such as trading above its 50-day and 200-day simple moving averages following a golden crossover. The company is aggressively pursuing a growth strategy through expansions at its existing five mines and three development projects, aiming for over one million ounces in annual production, notably with the Greenstone project ramping up to a target of 390,000 ounces annually. The imminent acquisition of Calibre Mining Corp., expected to close by the end of June 2025, will further bolster its asset base and production capacity, creating a combined entity with over 1.2 million ounces of annual production and 23 million ounces of gold reserves. This growth trajectory is supported by a favorable gold price environment, with prices rallying approximately 27% this year and currently above $3,300 per ounce, which is anticipated to enhance EQX's profitability and cash flow generation. Despite these positives, EQX faces challenges with rising all-in-sustaining costs (AISC), which climbed to $2,065 per ounce in Q1 2025, reflecting operational cost inflation and issues at the Greenstone and Los Filos mines. While the company expects costs to decrease in the second half of 2025 with increased production, and maintains a strong liquidity position ($173 million in cash and $65 million undrawn credit facility as of Q1-end), earnings estimates for 2025 and 2026 have seen downward revisions, although they still imply substantial year-over-year growth of 230% and 106%, respectively.

Key Decisions for Investors

• Investors should recognize Equinox Gold's significant undervaluation relative to industry comparables and its strong growth pipeline, including the Greenstone ramp-up and the accretive Calibre Mining acquisition.
• Careful monitoring of the company's ability to control and reduce its all-in-sustaining costs, particularly in the upcoming quarters, is crucial, as this remains a key headwind despite an otherwise positive operational outlook for the second half of 2025.
• Given the supportive gold price environment and substantial production growth expected, maintaining current positions may be prudent to capitalize on future synergies and operational improvements, aligning with a cautiously optimistic outlook focused on execution through late 2025.