If you own Newmont shares or are thinking about making a move, you’re not alone in wondering what the recent rollercoaster in price really means for the stock. Over the past month, Newmont is up an impressive 14.0%, and if you’ve held on since the beginning of the year, you’re looking at a 105.1% return. Even the past twelve months show a rock-solid gain of 51.3%. What’s driving this momentum and should you expect it to continue?

A few key headlines have shaped the story. There’s talk of job cuts as Newmont looks to bring down costs after its $15 billion Newcrest Mining acquisition. Meanwhile, analysts like those at Barron’s say the stock still looks cheap relative to earnings, especially with gold and silver prices on the rise. Add in policy clarity from the White House about tariffs not applying to gold bars, which is a boon for gold miners in general, and it’s no wonder investors see both opportunity and reduced risk on the horizon.

But let’s get to the big question: is Newmont actually undervalued at current prices, or is the strong run already priced in? By the numbers, the company scores a 4 out of 6 on our core valuation checklist, suggesting it’s undervalued in most categories, but not all. Coming up, I’ll break down exactly how these checks work and where Newmont stands out. Stick with me a bit longer and I’ll also share a smarter, more holistic way to look at valuation beyond the usual ratios.

Newmont delivered 51.3% returns over the last year. See how this stacks up to the rest of the Metals and Mining industry.

A Discounted Cash Flow (DCF) model estimates the value of a company by projecting its future free cash flows and discounting them back to their value in today's dollars. For Newmont, the analysis uses a 2 Stage Free Cash Flow to Equity model, which takes into account both near-term growth and long-term expectations.

Currently, Newmont's Free Cash Flow stands at $4.7 Billion. Analyst estimates project annual cash flows to rise, with forecasts reaching around $5.0 Billion by 2029. The model uses analyst forecasts for the next five years and then extrapolates results further out, assuming a reasonable, steady rate of growth.

Based on these projections, Newmont's intrinsic value is estimated at $88.07 per share. Compared to the current share price, this suggests the stock is 10.7% undervalued according to the DCF model.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Newmont.

Our Discounted Cash Flow (DCF) analysis suggests Newmont is undervalued by 10.7%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

The Price-to-Earnings (PE) ratio is a go-to valuation metric for profitable companies like Newmont because it connects the share price directly to the company’s actual earnings. It gives investors a way to measure how much they’re paying for each dollar of profit, which is especially useful when earnings are stable and reliable.

Of course, the right PE ratio isn’t one-size-fits-all. High-growth companies and those with low risk usually trade at higher PEs, while those with slower growth or more uncertainty earn lower multiples. That makes context important: for Newmont, the current PE is 13.8x. The industry average for Metals and Mining is 23.3x, and the average for direct peers is 31.4x, making Newmont look relatively cheap at first glance.

But rather than just comparing to those broad benchmarks, Simply Wall St’s proprietary “Fair Ratio” adjusts for Newmont’s specific characteristics such as earnings growth, profit margins, industry outlook, market cap, and risk. In this case, the Fair PE ratio is 21.9x. Because it incorporates fundamental drivers instead of just what other companies are trading at, it is a more tailored and meaningful measure of value.

Comparing Newmont's actual PE of 13.8x with the Fair Ratio of 21.9x suggests the stock is trading below what would be expected given its profile. This points to an undervalued opportunity for investors.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Earlier we mentioned there is an even better way to understand valuation, so let’s introduce you to Narratives. A Narrative is essentially the story you believe about a company, turning your perspective—your assumptions about fair value, future revenue, earnings, and profit margins—into a tailored forecast. Instead of just focusing on numbers, Narratives connect what is unique or changing about Newmont to a financial outcome, and then to a dynamic fair value, making investment decisions more personal and relevant.

On Simply Wall St’s Community page, millions of investors access an intuitive Narratives tool that allows you to quickly see how your view of Newmont’s prospects leads to a specific fair value and how that compares to the current market price. Whenever new earnings, news, or data become available, Narratives update automatically, showing instantly how your estimate changes. For instance, some investors see gold demand, successful asset integration, and margin expansion propelling Newmont to a fair value of $104 per share. Others focus on operational risks or rising costs and land at a much lower $58. Narratives let you compare these views, update your own beliefs, and always know if Newmont is a buy, hold, or sell for you as the story evolves. Do you think there's more to the story for Newmont? Create your own Narrative to let the Community know!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include NEM.

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