Time To Buy Newmont Stock?

Newmont (NYSE:NEM) stock looks attractive – making it a good pick to buy at its current price of around $43. We believe there is minimal cause for concern with NEM stock, which makes it attractive given that its current valuation looks low.

We arrive at our conclusion by comparing the current valuation of NEM stock with its operating performance over the recent years as well as its current and historical financial condition. Our analysis of Newmont along key parameters of Growth, Profitability, Financial Stability, and Downturn Resilience shows that the company has a very strong operating performance and financial condition, as detailed below.

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How does Newmont’s valuation look vs. the S&P 500?

Going by what you pay per dollar of sales or profit, NEM stock looks slightly cheap compared to the broader market.

• Newmont has a price-to-sales (P/S) ratio of 2.6 vs. a figure of 3.2 for the S&P 500
• Additionally, the company’s price-to-operating income (P/EBIT) ratio is 8.2 compared to 24.3 for S&P 500
• And, it has a price-to-earnings (P/E) ratio of 7.6 vs. the benchmark’s 24.3

How have Newmont’s revenues grown over recent years?

Newmont’s Revenues have grown considerably over recent years.

• Newmont has seen its top line grow at an average rate of 18.3% over the last 3 years (vs. increase of 6.9% for S&P 500)
• Its revenues have grown 58.2% from $12 Bil to $19 Bil in the last 12 months (vs. growth of 5.2% for S&P 500)
• Also, its quarterly revenues grew 42.8% to $5.7 Bil in the most recent quarter from $4.0 Bil a year ago (vs. 5.0% improvement for S&P 500)

How profitable is Newmont?

Newmont’s profit margins are much higher than most companies in the Trefis coverage universe.

• Newmont’s Operating Income over the last four quarters was $5.9 Bil, which represents a high Operating Margin of 31.6% (vs. 13.0% for S&P 500)
• Newmont’s Operating Cash Flow (OCF) over this period was $6.4 Bil, pointing to a high OCF-to-Sales Ratio of 34.1% (vs. 15.7% for S&P 500)

Does Newmont look financially stable?

Newmont’s balance sheet looks strong.

• Newmont’s Debt figure was $9.0 Bil at the end of the most recent quarter, while its market capitalization is $50 Bil (as of 3/10/2025). This implies a strong Debt-to-Equity Ratio of 18.5% (vs. 19.0% for S&P 500). [Note: A lower Debt-to-Equity Ratio is desirable]
• Cash (including cash equivalents) makes up $3.6 Bil of the $56 Bil in Total Assets for Newmont.  This yields a moderate Cash-to-Assets Ratio of 6.5% (vs. 14.8% for S&P 500)

How resilient is NEM stock during a downturn?

NEM stock has seen an impact that was slightly better than the benchmark S&P 500 index during some of the recent downturns. Worried about the impact of a market crash on NEM stock? Our dashboard How Low Can Stocks Go During A Market Crash captures how key stocks fared during and after the last six market crashes.

Inflation Shock (2022)

• NEM stock fell 55.8% from a high of $85.42 on 18 April 2022 to $37.79 on 3 November 2022, vs. a peak-to-trough decline of 25.4% for the S&P 500
• The stock is yet to recover to its pre-Crisis high
• The highest the stock has reached since then is $58.68 on 22 October 2024 and currently trades at around $43

Covid Pandemic (2020)

• NEM stock fell 24.5% from a high of $52.35 on 8 March 2020 to $39.50 on 15 March 2020, vs. a peak-to-trough decline of 33.9% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 9 April 2020

Global Financial Crisis (2008)

• NEM stock fell 61.7% from a high of $56.22 on 14 January 2008 to $21.54 on 27 October 2008, vs. a peak-to-trough decline of 56.8% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 11 May 2010

Putting all the pieces together: What it means for NEM stock

In summary, Newmont’s performance across the parameters detailed above are as follows:

• Growth: Extremely Strong
• Profitability: Very Strong
• Financial Stability: Strong
• Downturn Resilience: Neutral
• Overall: Very Strong

Taken together with its low valuation, this makes the stock look attractive, which supports our conclusion that NEM is a good stock to buy.

While NEM stock looks promising, investing in a single stock can be risky. On the other hand, the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming the S&P 500 over the last 4-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride as evident in HQ Portfolio performance metrics.

[1] Returns as of 3/11/2025
[2] Cumulative total returns since the end of 2016

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