Long-established in the Metals & Mining industry, Newmont Corp (NEM, Financial) has enjoyed a stellar reputation. However, it has recently witnessed a daily loss of 3.65%, juxtaposed with a three-month change of -15.63%. Fresh insights from the GF Score hint at potential headwinds. Notably, its diminished rankings in financial strength, growth, and valuation suggest that the company might not live up to its historical performance. Join us as we dive deep into these pivotal metrics to unravel the evolving narrative of Newmont Corp.
Decoding the GF Score
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 6/10
- Profitability rank: 6/10
- Growth rank: 4/10
- GF Value rank: 8/10
- Momentum rank: 2/10
Based on the above method, GuruFocus assigned Newmont Corp the GF Score of 69 out of 100, which signals poor future outperformance potential.
Understanding Newmont Corp's Business
Newmont Corp, with a market cap of $28.27 billion, is the world's largest gold miner, producing about 6 million attributable ounces of gold in 2022, good for about 5% of global mined output. The company also produced 1.3 million attributable gold equivalent ounces from the sale of byproducts, including copper, silver, zinc, and lead in 2022. It had about two decades of gold reserves along with significant byproduct reserves at end 2022. After buying Goldcorp in 2019 and combining its Nevada mines in a joint venture with competitor Barrick later that year, Newmont's portfolio includes 12 wholly owned mines and interests in two joint ventures in the Americas, Africa, and Australia.
Growth Prospects
A lack of significant growth is another area where Newmont Corp seems to falter, as evidenced by the company's low Growth rank. Over the past five years, Newmont Corp has witnessed a decline in its earnings before interest, taxes, depreciation, and amortization (EBITDA). The three-year growth rate is recorded at -28.4, while the five-year growth rate is at -5.9. These figures underscore potential challenges in the company's profitability. Lastly, Newmont Corp predictability rank is just one star out of five, adding to investor uncertainty regarding revenue and earnings consistency.
Conclusion
Given the company's financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential underperformance. While Newmont Corp has a rich history and significant market presence, its current financial and growth indicators suggest that it may struggle to maintain its past performance. Investors should consider these factors when making investment decisions.
GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen
