Read This to Understand Barrick Gold (GOLD)

It's been a great evening session for Barrick Gold investors, who saw their shares rise 1.3% to a price of $17.73 per share. At these higher prices, is the company still fairly valued? If you are thinking about investing, make sure to check the company's fundamentals before making a decision.

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

Barrick Gold Corporation engages in the exploration, mine development, production, and sale of gold and copper properties. The company belongs to the Basic Materials sector, which has an average price to earnings (P/E) ratio of 16.53 and an average price to book (P/B) ratio of 2.07. In contrast, Barrick Gold has a trailing 12 month P/E ratio of 591.0 and a P/B ratio of 1.35.

Barrick Gold's PEG ratio is 3.21, which shows that the stock is probably overvalued in terms of its estimated growth. For reference, a PEG ratio near or below 1 is a potential signal that a company is undervalued.

The Business Has Weak Operating Margins:

2018 2019 2020 2021 2022 2023
Revenue (MM) $8,374 $9,717 $12,595 $12,595 $11,985 $11,013
Revenue Growth n/a 16.04% 29.62% 0.0% -4.84% -8.11%
Net Margins 19% 47% 37% 30% 27% 10%
Net Income (MM) $1,554 $4,610 $4,610 $3,750 $3,251 $1,066
Net Interest Expense (MM) $511 $452 $435 $357 $366 $366
Free Cash Flow (MM) $3,139 $3,778 $6,430 $6,430 $5,920 $4,464
Current Ratio 2.68 2.9 3.43 3.72 2.71 2.71
Total Debt (MM) $7,007 $6,916 $6,079 $5,897 $6,699 $6,333

Barrick Gold has growing revenues and no capital expenditures, healthy debt levels, and irregular cash flows. However, the firm has weak operating margins with a unknown rate of growth. Finally, we note that Barrick Gold has positive expected EPS Growth.

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.