‘A compelling entry point’: Freedom Broker upgrades Vox Royalty

Freedom Broker has upgraded its rating on Canada’s Vox Royalty, a small cap whose  business model centers around royalty payments from gold miners. Even though Vox’s first-quarter financial results came in below expectations, the company also announced the acquisition of a royalty in a new asset, which, according to Freedom Broker, should enhance its financial situation. Freedom Broker believes investors now have a “compelling entry point.”

Freedom Broker has upgraded its recommendation for Vox Royalty stock from “hold” to “buy” and raised its target price to $4 per share, according to a note seen by Oninvest. The new target price is almost 21% above current quotes: On Friday, May 23, the stock closed at $3.31 per share.

Freedom Broker revised its rating after the company released its first-quarter financial results, which, as Freedom Broker points out, came in worse than Wall Street expected. Vox’s revenue fell 7% year over year to $2.68 million, 17-18% below the consensus forecast, while the net loss grew almost 49% to $359,000 versus the $0.4-0.5 million net gain Wall Street expected.

However, Freedom Broker believes a recent acquisition will improve the company’s financial position: Vox will receive royalty payments from the Koonenberry copper-gold mine in South Australia. On May 15, the company announced the deal and, later in the day, raised its full-year 2025 revenue guidance from $12-14 million to $13-15 million.

Additionally, Freedom Broker points out that Vox stock remains undervalued relative to peers.

“The valuation gap, combined with supportive trends in gold and copper markets, in our view, represents a compelling entry point,” Freedom Broker concludes.

Founded in 2014, Vox describes itself as a returns-focused mining royalty company. This business model is an increasingly popular investment vehicle for those looking to gain exposure to the sector without taking on the risks associated with a direct stake, says the firm. An investor funds a project but receives a royalty rather than an equity stake. Once considered an alternative financing instrument, royalty financing is now mainstream, according to Vox’s website.

The company’s portfolio includes over 60 royalties, mostly located in North America and Australia.

According to MarketWatch, all five analysts covering Vox have “buy” recommendations. Their average target price of $4.71 per share implies upside of over 42% versus the last closing price.