Have you been paying attention to shares of New Gold (NGD)? Shares have been on the move with the stock up 9.9% over the past month. The stock hit a new 52-week high of $3.98 in the previous session. New Gold has gained 60.5% since the start of the year compared to the 4.2% move for the Zacks Basic Materials sector and the 46.8% return for the Zacks Mining - Gold industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on April 29, 2025, New Gold reported EPS of $0.02 versus consensus estimate of $0.01.
For the current fiscal year, New Gold is expected to post earnings of $0.39 per share on $1.24 billion in revenues. This represents a 95% change in EPS on a 33.59% change in revenues. For the next fiscal year, the company is expected to earn $0.67 per share on $1.67 billion in revenues. This represents a year-over-year change of 72.44% and 35.38%, respectively.
Valuation Metrics
New Gold may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
New Gold has a Value Score of B. The stock's Growth and Momentum Scores are B and C, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 10.3X current fiscal year EPS estimates, which is not in-line with the peer industry average of 14.1X. On a trailing cash flow basis, the stock currently trades at 7.8X versus its peer group's average of 10.9X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, New Gold currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if New Gold meets the list of requirements. Thus, it seems as though New Gold shares could have a bit more room to run in the near term.
How Does NGD Stack Up to the Competition?
Shares of NGD have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Agnico Eagle Mines Limited (AEM). AEM has a Zacks Rank of # 2 (Buy) and a Value Score of C, a Growth Score of B, and a Momentum Score of A.
Earnings were strong last quarter. Agnico Eagle Mines Limited beat our consensus estimate by 10.07%, and for the current fiscal year, AEM is expected to post earnings of $6.11 per share on revenue of $9.99 billion.
Shares of Agnico Eagle Mines Limited have gained 9.4% over the past month, and currently trade at a forward P/E of 19.25X and a P/CF of 16.25X.
The Mining - Gold industry is in the top 18% of all the industries we have in our universe, so it looks like there are some nice tailwinds for NGD and AEM, even beyond their own solid fundamental situation.
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New Gold Inc. (NGD): Free Stock Analysis Report Agnico Eagle Mines Limited (AEM): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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