Newmont Corporation

Analysis of NEM

Technical Perspective NEM has shown remarkable momentum, gaining over 40% in three months and significantly outperforming the broader market. While the stock is trading near its 52-week highs, its low beta indicates relative stability, suggesting the recent advance may be sustainable rather than overextended. The modest recent consolidation appears healthy after such strong performance.

Fundamental Assessment The company exhibits strong revenue growth and exceptionally healthy profit margins, supported by a nearly debt-free balance sheet. However, operational efficiency metrics like ROE and asset turnover are modest, indicating room for improvement in capital allocation. Overall, NEM demonstrates financial robustness with solid cash generation.

Valuation & Risk Outlook Valuation presents mixed signals: while the P/E ratio appears reasonable, the extremely high EV/EBITDA and negative PEG ratio raise concerns about growth prospects and potential overvaluation. Risk is moderated by the stock's low volatility and strong liquidity, though reliance on commodity prices remains an inherent sector risk.

Recommendation NEM presents a compelling case for investors seeking exposure to a financially stable gold miner with strong momentum. Its robust balance sheet and profitability provide a solid foundation, though valuation concerns and modest operational efficiency warrant caution. For investors comfortable with the gold sector's cyclicality, NEM represents a quality holding, but those focused on growth may want to monitor earnings trajectory more closely.

*Note: This is not investment advice, for reference only.*

RockFlow Model Forecast: Three Scenarios for 2026

Based on the analysis provided, here is a 12-month outlook for NEM:

The primary catalysts for NEM over the next year are its strong operational momentum, underpinned by robust revenue growth and a nearly debt-free balance sheet that provides significant financial flexibility. The key upside potential is heavily tied to the performance of gold prices, which could drive further gains. However, the main risks are its elevated valuation multiples (notably the high EV/EBITDA) and modest operational efficiency, which could limit upside if gold prices stagnate or if earnings growth disappoints. While a specific analyst target is unavailable, investor focus should remain on the sustainability of its earnings trajectory relative to its current premium valuation near 52-week highs.

Wall Street Consensus

Most Wall Street analysts are optimistic about Newmont Corporation's 12-month outlook, with consensus target around $124.09, indicating expected upside potential.

Overall, NEM has investment potential but also faces challenges. Here are key factors to weigh before investing.

NEM has demonstrated exceptionally strong long-term performance despite recent short-term consolidation. The stock has more than tripled from its 52-week low while maintaining relatively low volatility compared to the broader market.

Over the past three months, NEM has significantly outperformed the market with a 42% gain, though it has experienced modest consolidation recently with a 1% decline over the past month. The substantial 38% relative strength versus the market highlights the stock's impressive momentum during this period.

Currently trading at $123, NEM sits in the upper quartile of its 52-week range, approximately 86% above its low but still 9% below its peak. Given the recent strong advance and current position near yearly highs, the stock appears somewhat extended though not necessarily overbought given its low beta characteristics.

Revenue & Profitability NEM demonstrates strong revenue growth with Q4 2025 revenue increasing 33% to $7.14 billion from Q3's $5.38 billion, though net income declined to $1.38 billion from $1.83 billion. The company maintains robust profitability with a gross profit margin exceeding 100% in Q4 (104.2%) and net profit margin of 19.4%, indicating efficient cost management despite a significant tax burden.

Financial Health The company exhibits exceptional financial strength with minimal debt, reflected in a debt ratio of just 0.83% and debt-to-equity ratio of 1.4%. Strong liquidity is evident with current ratio of 1.72 and cash ratio of 1.34, supported by healthy operating cash flow coverage ratios exceeding 7.6x debt obligations.

Operational Efficiency NEM shows moderate operational efficiency with ROE of 4.1% and asset turnover of 0.13, suggesting room for improvement in capital utilization. However, the company generates solid cash flow metrics with free cash flow per share of $5.29 and operating cash flow per share of $3.27, indicating effective cash generation from operations.

Valuation Level: NEM's current and forward P/E ratios around 19 suggest a moderate valuation for a gold mining company, though the negative PEG ratio indicates that earnings growth expectations are either negative or minimal, which raises concerns about growth prospects. The extremely high EV/EBITDA of 129 is a significant red flag, suggesting potential issues with profitability or high debt levels relative to operating earnings. Based on these metrics, the stock appears potentially overvalued when considering its lack of earnings growth and poor cash flow generation.

Peer Comparison: Without specific industry average data for comparison, a definitive peer assessment cannot be made. Generally, gold miners often trade at lower P/E multiples than NEM's ~19, particularly given the current negative earnings growth implied by its PEG ratio. The astronomical EV/EBITDA ratio is almost certainly an outlier compared to industry norms, strongly indicating that NEM's valuation is stretched relative to its operational performance versus peers.

Volatility Risk: NEM demonstrates very low volatility risk, with a Beta of 0.42 indicating that the stock is significantly less volatile than the broader market. Its 1-year maximum drawdown of -19.99% is relatively modest, typical for a defensive or commodity-linked stock. This suggests the stock offers a degree of stability during market downturns but may also lag during strong market rallies.

Other Risks: The negligible short interest implies a general market consensus that the stock is not significantly overvalued or facing imminent negative catalysts. However, this lack of trading activity could also point to potential liquidity risks or limited investor interest. The primary risk thus likely stems from external macroeconomic factors affecting the mining industry, such as commodity price fluctuations, rather than from market-driven sentiment or trading pressures.