In the world of precious metals
and mining stocks, few small-caps have attracted investor attention like TRX
Gold Corporation (NYSE: TRX). After reporting exceptional year-over-year growth
in quarterly revenue and free cash flow alongside strong operational progress
at its flagship gold project, TRX is increasingly viewed as an undervalued
growth opportunity as we head into 2026. In this article we will dive into TRX
Gold recent earnings, stock performance & valuation, growth potential, and
the risks investor should consider.
About TRX Gold
TRX Gold Corporation is a
Canada-based gold producer and developer founded in 1990 and headquartered in
Oakville, Ontario, with a primary focus on advancing its Buckreef Gold Project
in Tanzania. The company’s flagship Buckreef operation is an open-pit gold mine
supported by ongoing drilling programs and processing plant expansions aimed at
increasing resources and production. With nearly two decades of operating
experience in Tanzania’s Geita Region, TRX has demonstrated disciplined growth,
infrastructure development, and steadily improving production throughput.
TRX Gold Financial Performance
TRX Gold delivered a strong
top-line performance in its most recent quarterly results, highlighting
meaningful operational progress despite short-term earnings pressure. For Q1
2026, which ended in November 2025, the company reported revenue of $25.12 million,
more than doubling from $12.53 million in Q1 2025, representing a 100.49%
year-over-year increase. Earnings per share (EPS) for the quarter came in at
–$0.01, compared to $0.003 in the prior-year period, reflecting a 433.3%
decline, primarily due to operating expense and tax costs. On a trailing
twelve-month (TTM) basis, revenue reached $70.2 million, up from $44.28 million
in Q1 2025, marking a 58.53% increase, while TTM EPS declined to –$0.02 from
$0.01, a 300% decrease. Importantly, cash flow metrics showed substantial improvement,
with free cash flow (TTM) rising to $4.22 million from –$0.93 million a year
earlier, an impressive 553.76% increase, underscoring the company’s improving
operational efficiency. Profitability metrics further reflect solid underlying
economics, with a gross profit margin of 53.15%, a net profit margin of –6.36%,
and a free cash flow margin of 6.02%.
Over the past five years, TRX
Gold has transformed from a pre-revenue company into a stable gold producer.
Net income and free cash flow turned positive in 2023 and have continued to
grow as TRX expands its production capacity.
TRX Gold Fiscal 2026 Financial
Forecast
Looking ahead, analyst
projections remain highly optimistic, forecasting 2026 revenue of $121.46
million, representing a 111.12% increase from 2025 revenue of $57.53 million,
alongside non-GAAP EPS of $0.07, up 216.59% from 2025 EPS of $0.02. Reflecting these
expectations, Wall Street analysts have assigned a Strong Buy rating to the
stock, with an average price target of $1.57, implying 66.07% upside, while the
highest price target of $1.80 suggests a potential upside of 90.48% from
current level.
TRX Stock Price Performance
and Valuation
At the time this article was
written TRX Gold’s stock was trading at $0.95 per share. The stock has
surged 203.9% over the past one year, significantly outperforming the S&P
500’s 13.6% gain during the same period. While longer-term performance has
been more moderate, TRX shares are still up 40.8% over the past five years,
although this underperformed the S&P 500’s 78.9% increase over that
timeframe, suggesting the recent rally may represent a catch-up phase rather
than overvaluation. From a valuation standpoint, TRX trades at a price-to-sales
(TTM) ratio of 4.15, which declines to a forward P/S of 2.34. The
company currently has no applicable non-GAAP P/E on a trailing basis,
reflecting recent losses, but trades at a forward non-GAAP P/E of 13.57,
a very low multiple for a company expected to deliver high revenue growth.
While the P/FCF (TTM) is remains high at 67.34 because of its early
stage cash flow generation.
Based on Fiscal.ai data if we
look at the valuation since 2023, the forward P/S and forward P/E is at around
the average. With the combination of strong revenue growth, improving cash
generation, and a declining forward valuation supports the view that TRX Gold
remains attractively positioned for investors seeking exposure to a high-growth
gold producer despite its recent share price appreciation.
TRX Gold Growth Potential
TRX Gold growth prospect remains
solid, driven by several factors.
- Record Production &
Operational Leverage
TRX Gold delivered record quarterly production of 6,597 ounces in Q1 2026, selling 6,492 ounces at an average realized price of $3,860 per ounce. This marked a 35% year-over-year increase from 4,813 ounces sold, underscoring the company’s ability to scale output while maintaining operational discipline. The strong performance reflects successful access to higher-grade ore following completion of planned pit stripping in the prior fiscal year, improving ore quality and recovery efficiency.
In fiscal 2025, TRX processed 541,000 tonnes of ore, up 52% from 355,000 tonnes the year before, demonstrating enhanced mill throughput. With fiscal 2026 guidance of 25,000–30,000 ounces and a growing run-of-mine stockpile of 22,891 ounces, the company is positioned for sustained production growth, improved cost leverage, and stronger cash generation to support expansion. - Processing Plant Expansion
& Capacity Scaling
The core of TRX Gold’s growth strategy is a phased expansion of the Buckreef processing plant, increasing throughput beyond 3,000 tonnes per day from the current 2,000 tpd. A May 2025 Preliminary Economic Assessment outlines average annual production of 62,000 ounces over a 17.6-year mine life, delivering a pre-tax NPV of US$1.9 billion at a US$4,000 gold price.
Management expects the redesigned plant to surpass this target through an enhanced flowsheet featuring additional flotation, grinding, and recovery circuits.The expansion is split into two tracks: Track 1 plant upgrades to be completed in fiscal 2026, and Track 2 construction of the full 3,000+ tpd circuits by fiscal 2027. The US$30 million capital program is fully funded internally, minimizing execution, financing, and dilution risk. - Exploration Upside
& Resource Growth
Exploration success provides significant upside to TRX Gold’s long-term production and resource growth. In Q1 2025, the company identified the Stamford Bridge Zone, a high-grade shear structure that may connect the Buckreef Main Zone with the Eastern Porphyry and Anfield zones, supporting the potential for contiguous mineralization and extended mine life. Building on this, TRX initiated an 810 line-kilometer ground magnetic survey in Q1 2026 to map structural features and prioritize new drill targets, with results expected in Q2 2026.
Exploration capacity has been expanded through the acquisition of new RC and diamond rigs, reducing drilling costs. A $3–$5 million fiscal 2026 exploration budget will fund definition and step-out drilling, fully financed by operating cash flow. Higher gold prices further enhance resource growth by lowering economic cut-off grades.
Risks to Consider
While TRX Gold looks like an
undervalued opportunity, we should be mindful of potential risks.
- Single‑asset and country
concentration
TRX Gold’s operations are heavily concentrated in the Buckreef project in Tanzania, leaving the company without diversification by asset or jurisdiction. Any disruption at Buckreef whether operational, geological, regulatory, or social could sharply affect production, cash flow, and company valuation. With no second producing mine to share or absorb these shocks, project‑specific setbacks translate directly into heightened overall business and investment risk. - Expansion, execution, and cost
inflation risk
TRX Gold's growth narrative relies on expanding Buckreef’s plant capacity and transitioning from open-pit to underground mining in the coming years, a process that is both capital intensive and technically complex. Critical risks include construction delays, mill expansion challenges, cost overruns, and maintaining all-in sustaining costs within projections, particularly amid inflation pressures on mining inputs. Failure in execution could significantly undermine timelines and financial outcomes. - Gold price and unhedged
revenue risk
TRX Gold's revenue and cash flow rely almost entirely on gold prices, as the company does not hedge its production, leaving it fully vulnerable to market downturns. A weakening gold price during its expansion phase funded largely through internal cash flow could strain project timelines, capital plans, and shareholder returns, heightening financial pressures. This unhedged exposure amplifies volatility risks for investors.
Conclusion
TRX Gold presents a compelling investment case driven by rapid revenue growth, a sharp turnaround in free cash flow, and accelerating production momentum at its Buckreef Gold Project. Despite short-term earnings volatility, the company’s strong balance sheet, improving operational efficiency, and favorable analyst forecasts point to substantial upside potential. With a reasonable forward valuation and powerful gold market tailwinds, TRX Gold stands out as an attractive growth-oriented opportunity for investors willing to tolerate near-term risk.
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