A strong performer from today's morning trading session is Barrick Gold, whose shares rose 1.3% to $20.84 per share. For those of you thinking about investing in the stock, here is a brief value analysis of the stock using the company's basic fundamental ratios.
Barrick Gold's Earnings and Assets May Be Undervalued:
Barrick Gold Corporation engages in the exploration, mine development, production, and sale of gold and copper properties in Canada and internationally. The company belongs to the Basic Materials sector, which has an average price to earnings (P/E) ratio of 23.66 and an average price to book (P/B) ratio of 2.69. In contrast, Barrick Gold has a trailing 12 month P/E ratio of 24.2 and a P/B ratio of 1.55.
Barrick Gold's PEG ratio is 2.4, 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.
Generally Positive Cash Flows and a Positive EPS Growth Rate:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $7,243 | $9,717 | $12,595 | $11,985 | $11,013 | $11,397 |
| Net Margins | -21% | 41% | 18% | 17% | 4% | 11% |
| Net Income (M) | -$1,545 | $3,969 | $2,324 | $2,022 | $432 | $1,272 |
| Net Interest Expense (M) | $452 | $435 | $342 | $357 | $366 | $387 |
| Earnings Per Share | -$1.32 | $2.26 | $1.31 | $1.14 | $0.24 | $0.72 |
| EPS Growth | n/a | 271.21% | -42.04% | -12.98% | -78.95% | 200.0% |
| Free Cash Flow (M) | $1,765 | $2,833 | $5,417 | $4,378 | $3,481 | $3,732 |
| Total Debt (M) | $5,695 | $5,161 | $5,135 | $5,135 | $4,769 | $4,715 |
| Current Ratio | 2.38 | 2.9 | 3.67 | 3.95 | 2.71 | 3.16 |
Barrick Gold has generally positive cash flows, an excellent current ratio of 3.16, and positive EPS growth.
