What Every Investor Must Know About NEM Stock

Today we're going to take a closer look at large-cap Basic Materials company Newmont, whose shares are currently trading at $39.09. We've been asking ourselves whether the company is under or over valued at today's prices... let's perform a brief value analysis to find out!

Newmont Has an Attractive P/B Ratio but a Worrisome P/E Ratio:

Newmont Corporation engages in the production and exploration of gold. The company belongs to the Basic Materials sector, which has an average price to earnings (P/E) ratio of 10.03 and an average price to book (P/B) ratio of 2.08. In contrast, Newmont has a trailing 12 month P/E ratio of -39.9 and a P/B ratio of 1.61.

Newmont has moved -3.0% over the last year compared to 17.0% for the S&P 500 — a difference of -20.0%. Newmont has a 52 week high of $55.41 and a 52 week low of $37.45.

Shareholders Are Confronted With a Declining EPS Growth Trend:

2021-02-18 2022-02-24 2023-02-23
Revenue (MM) $11,497 $12,222 $11,915
Gross Margins 56.0% 56.0% 46.0%
Operating Margins 28% 16% 13%
Net Margins 25.0% 10.0% -4.0%
Net Income (MM) $2,829 $1,166 -$429
Net Interest Expense (MM) -$308 -$274 -$227
Depreciation & Amort. (MM) -$2,300 -$2,323 -$2,185
Earnings Per Share $3.51 $1.46 -$0.54
EPS Growth n/a -58.4% -136.99%
Diluted Shares (MM) 806 800 795
Free Cash Flow (MM) $6,184 $5,932 $5,351
Capital Expenditures (MM) -$1,302 -$1,653 -$2,131
Net Current Assets (MM) -$8,985 -$11,007 -$12,434
Long Term Debt (MM) $7,038 $6,475 $6,399
Net Debt / EBITDA 0.34 0.39 0.95

Newmont has an excellent current ratio and wider gross margins than its peer group. Additionally, the company's financial statements display decent operating margins with a negative growth trend and healthy leverage. However, the firm has declining EPS growth. Finally, we note that Newmont has weak revenue growth and a flat capital expenditure trend and irregular cash flows.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.