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DRD Surges 249% YTD: Can it Sustain its Market-Beating Rally?
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Key Takeaways
DRDGOLD gained 249.3% YTD, far outpacing peers and broader market performance.
Adjusted EBITDA for Q126 was R1.06 billion and revenues were R2.25 billion.
DRDGOLD remains debt-free with a twofold rise in dividend.
DRDGOLD Ltd. (DRD - Free Report) has gained 249.3% year to date compared with the Zacks Mining- Gold industry’s 131.9% increase and the S&P 500’s modest 14.5% rise. The performance was underpinned by operational excellence, strategic project execution and an unwavering commitment to shareholder value as well as rising gold prices.
Among its peers, AngloGold Ashanti Plc. (AU - Free Report) and Alamos Gold (AGI - Free Report) ) are up 225.9% and 95.4%, respectively, in the same period.
DRD'S YTD Performance Vs. Industry, Sector, S&P 500 & Peers
Image Source: Zacks Investment Research
Technical indicators show that DRD has been trading above the 50-day and 200-day simple moving average (SMA). The 50-day SMA is reading higher than the 200-day SMA, indicating a bullish trend.
Image Source: Zacks Investment Research
Let’s look at the DRS’ fundamentals to analyze the stock better.
DRDGOLD delivered a stable performance in the first quarter of fiscal 2026 (ended Sept. 30, 2025), maintaining its profitability despite operational and cost pressures. The company reported revenues of R2.25 billion ($0.12 billion), representing a modest 2% sequential increase, supported by slightly higher gold sales and a favorable gold price environment.
Gold production increased 2% to 1,191 kg, largely due to better recovery efficiency.
Costs, however, edged higher during the quarter. The cash operating cost per kilogram increased 3% to R0.95 million ($0.053 million), mainly because of rising labor, rent and electricity expenses.
Similarly, the cash operating cost per ton rose 8% to R179, while the all-in sustaining cost (AISC) climbed 5% to R1,066,287 per kilogram. The all-in cost per kilogram increased about 6% to R1,745,213, reflecting higher growth capital expenditure.
Despite these cost escalations, DRDGOLD’s adjusted EBITDA came in at R1.09 billion ($0.06 billion), up 1% sequentially, reflecting resilience in operations and continued benefit from high metal prices.
DRDGOLD has been delivering improved profits, underscoring its ability to capture the benefits of higher gold prices while maintaining a tight grip on costs. In fiscal 2025, DRDGOLD reported a 69% increase in operating profit, aided by higher production output and efficiency gains across processing plants.
DRDGOLD’s strategy to focus exclusively on surface retreatment rather than deep-level mining has paid off handsomely. By recovering gold from old mine dumps and tailings dams, the company has avoided the high risks and costs associated with underground operations. This ensures consistency throughout and lower environmental impact and generates robust free cash flow. Lower energy consumption, optimized metallurgical recovery and improved material logistics have collectively contributed to healthier margins.
DRD's Debt-Free Status & Capital Discipline Fuel Growth
DRD’s financial position remains strong, with no debt on its balance sheet. At the end of the first quarter of fiscal 2026, cash and cash equivalents declined to R1.05 billion (roughly $0.06 billion) from R1.31 billion (roughly $0.07 billion) in the previous quarter, largely due to dividend payments and ongoing capital investment.
In fiscal 2025, DRDGOLD declared a final dividend of 40 South African cents per share for, double the previous year’s payout, along with an interim dividend earlier in the year, reaffirming its commitment to consistent capital distribution.
The company’s major growth investments, including the Regional Tailings Storage Facility, Driefontein 2 Plant expansion and renewable energy projects such as the solar PV plant and battery storage system, neared completion.
DRD’s planned total capital growth investment forecast for the medium-term is around R7.8 billion.
Growth Projects Powering the Next Phase
DRDGOLD’s value lies in its well-defined growth trajectory. The Far West Gold Recoveries (FWGR) project, its flagship initiative, remains a key pillar of the company’s future expansion. Located on the western outskirts of Johannesburg, South Africa, FWGR represents a multi-phase plan to process legacy mine dumps left by Sibanye-Stillwater’s Driefontein operations. This project has steadily increased its throughput capacity while maintaining some of the highest recovery efficiencies in the sector.
Phase 2 of FWGR, currently being advanced, includes the development of a major tailings storage facility and expanded milling capacity that will unlock substantial additional production. Management has stated that this phase is designed to deliver meaningful output growth at low incremental cost, ensuring that profit margins remain strong. Moreover, the project is expected to extend DRDGOLD’s production life significantly, giving it one of the most sustainable operational profiles among South African gold producers.
In addition to FWGR, DRDGOLD has continued to invest in digital technologies, real-time monitoring systems and renewable power infrastructure. The installation of solar power capacity across its operations is aimed at mitigating electricity supply risks from Eskom and lowering energy expenses. These sustainability-focused investments not only enhance cost resilience but also align with global ESG priorities.
The Zacks Consensus Estimate for DRD’s fiscal 2026 earnings is currently pegged at $1.42, suggesting a year-over-year decline of 0.7%.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2026 for DRD has been revised higher over the past 60 days, indicating optimism.
Image Source: Zacks Investment Research
DRDGOLD Trading Above Industry
DRDGOLD is currently trading at a forward 12-month price-to-earnings multiple of 23.81X, above the peer group average of 16.74X and its five-year median. The forward 12-month price-to-earnings multiples for AngloGold and Alamos Gold are 14.95X and 19.46X, respectively. The premium valuation seems justified given the company’s solid growth prospects.
Image Source: Zacks Investment Research
Final Thoughts: Buy DRD Now
DRDGOLD, with its Zacks Rank #1 (Strong Buy), continues to shine as a top performer in the gold sector, backed by exceptional operational execution, a debt-free balance sheet and disciplined capital management. Its impressive year-to-date rally reflects solid fundamentals rather than short-term speculation. With growth projects like FWGR and renewable energy investments driving efficiency and sustainability, the company is well-positioned for continued margin strength and production growth. Supported by rising dividends and a clear long-term vision, DRDGOLD remains firmly on a bullish trajectory, poised to deliver lasting value for shareholders.
Image: Bigstock
DRD Surges 249% YTD: Can it Sustain its Market-Beating Rally?
Key Takeaways
DRDGOLD Ltd. (DRD - Free Report) has gained 249.3% year to date compared with the Zacks Mining- Gold industry’s 131.9% increase and the S&P 500’s modest 14.5% rise. The performance was underpinned by operational excellence, strategic project execution and an unwavering commitment to shareholder value as well as rising gold prices.
Among its peers, AngloGold Ashanti Plc. (AU - Free Report) and Alamos Gold (AGI - Free Report) ) are up 225.9% and 95.4%, respectively, in the same period.
DRD'S YTD Performance Vs. Industry, Sector, S&P 500 & Peers
Technical indicators show that DRD has been trading above the 50-day and 200-day simple moving average (SMA). The 50-day SMA is reading higher than the 200-day SMA, indicating a bullish trend.
Let’s look at the DRS’ fundamentals to analyze the stock better.
DRD Reports Stable Q126 Performance Despite Cost Pressures
DRDGOLD delivered a stable performance in the first quarter of fiscal 2026 (ended Sept. 30, 2025), maintaining its profitability despite operational and cost pressures. The company reported revenues of R2.25 billion ($0.12 billion), representing a modest 2% sequential increase, supported by slightly higher gold sales and a favorable gold price environment.
Gold production increased 2% to 1,191 kg, largely due to better recovery efficiency.
Costs, however, edged higher during the quarter. The cash operating cost per kilogram increased 3% to R0.95 million ($0.053 million), mainly because of rising labor, rent and electricity expenses.
Similarly, the cash operating cost per ton rose 8% to R179, while the all-in sustaining cost (AISC) climbed 5% to R1,066,287 per kilogram. The all-in cost per kilogram increased about 6% to R1,745,213, reflecting higher growth capital expenditure.
Despite these cost escalations, DRDGOLD’s adjusted EBITDA came in at R1.09 billion ($0.06 billion), up 1% sequentially, reflecting resilience in operations and continued benefit from high metal prices.
DRD’s Results Reflect Cost Discipline & Operational Excellence
DRDGOLD has been delivering improved profits, underscoring its ability to capture the benefits of higher gold prices while maintaining a tight grip on costs. In fiscal 2025, DRDGOLD reported a 69% increase in operating profit, aided by higher production output and efficiency gains across processing plants.
DRDGOLD’s strategy to focus exclusively on surface retreatment rather than deep-level mining has paid off handsomely. By recovering gold from old mine dumps and tailings dams, the company has avoided the high risks and costs associated with underground operations. This ensures consistency throughout and lower environmental impact and generates robust free cash flow. Lower energy consumption, optimized metallurgical recovery and improved material logistics have collectively contributed to healthier margins.
DRD's Debt-Free Status & Capital Discipline Fuel Growth
DRD’s financial position remains strong, with no debt on its balance sheet. At the end of the first quarter of fiscal 2026, cash and cash equivalents declined to R1.05 billion (roughly $0.06 billion) from R1.31 billion (roughly $0.07 billion) in the previous quarter, largely due to dividend payments and ongoing capital investment.
In fiscal 2025, DRDGOLD declared a final dividend of 40 South African cents per share for, double the previous year’s payout, along with an interim dividend earlier in the year, reaffirming its commitment to consistent capital distribution.
The company’s major growth investments, including the Regional Tailings Storage Facility, Driefontein 2 Plant expansion and renewable energy projects such as the solar PV plant and battery storage system, neared completion.
DRD’s planned total capital growth investment forecast for the medium-term is around R7.8 billion.
Growth Projects Powering the Next Phase
DRDGOLD’s value lies in its well-defined growth trajectory. The Far West Gold Recoveries (FWGR) project, its flagship initiative, remains a key pillar of the company’s future expansion. Located on the western outskirts of Johannesburg, South Africa, FWGR represents a multi-phase plan to process legacy mine dumps left by Sibanye-Stillwater’s Driefontein operations. This project has steadily increased its throughput capacity while maintaining some of the highest recovery efficiencies in the sector.
Phase 2 of FWGR, currently being advanced, includes the development of a major tailings storage facility and expanded milling capacity that will unlock substantial additional production. Management has stated that this phase is designed to deliver meaningful output growth at low incremental cost, ensuring that profit margins remain strong. Moreover, the project is expected to extend DRDGOLD’s production life significantly, giving it one of the most sustainable operational profiles among South African gold producers.
In addition to FWGR, DRDGOLD has continued to invest in digital technologies, real-time monitoring systems and renewable power infrastructure. The installation of solar power capacity across its operations is aimed at mitigating electricity supply risks from Eskom and lowering energy expenses. These sustainability-focused investments not only enhance cost resilience but also align with global ESG priorities.
DRD's Rising Earning Estimates Reflect Positive Sentiments
The Zacks Consensus Estimate for DRD’s fiscal 2026 earnings is currently pegged at $1.42, suggesting a year-over-year decline of 0.7%.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2026 for DRD has been revised higher over the past 60 days, indicating optimism.
Image Source: Zacks Investment Research
DRDGOLD Trading Above Industry
DRDGOLD is currently trading at a forward 12-month price-to-earnings multiple of 23.81X, above the peer group average of 16.74X and its five-year median. The forward 12-month price-to-earnings multiples for AngloGold and Alamos Gold are 14.95X and 19.46X, respectively. The premium valuation seems justified given the company’s solid growth prospects.
Image Source: Zacks Investment Research
Final Thoughts: Buy DRD Now
DRDGOLD, with its Zacks Rank #1 (Strong Buy), continues to shine as a top performer in the gold sector, backed by exceptional operational execution, a debt-free balance sheet and disciplined capital management. Its impressive year-to-date rally reflects solid fundamentals rather than short-term speculation. With growth projects like FWGR and renewable energy investments driving efficiency and sustainability, the company is well-positioned for continued margin strength and production growth. Supported by rising dividends and a clear long-term vision, DRDGOLD remains firmly on a bullish trajectory, poised to deliver lasting value for shareholders.
You can see the complete list of today’s Zacks #1 Rank here.