Have you been paying attention to shares of New Gold (NGD)? Shares have been on the move with the stock up 23.9% over the past month. The stock hit a new 52-week high of $4.31 in the previous session. New Gold has gained 71.4% since the start of the year compared to the 5.9% move for the Zacks Basic Materials sector and the 45.5% 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 $0.41 per share on $1.31 billion in revenues. This represents a 105% change in EPS on a 41.21% change in revenues. For the next fiscal year, the company is expected to earn $0.70 per share on $1.87 billion in revenues. This represents a year-over-year change of 72.15% and 43.01%, 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 has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort 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. The idea behind the style scores is to help investors 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 B.
In terms of its value breakdown, the stock currently trades at 10.4X current fiscal year EPS estimates, which is not in-line with the peer industry average of 12.8X. On a trailing cash flow basis, the stock currently trades at 8.4X versus its peer group's average of 11X. 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 consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, New Gold currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
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 fits the bill. Thus, it seems as though New Gold shares could have potential in the weeks and months to come.
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 B2Gold Corp (BTG). BTG has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of A, and a Momentum Score of B.
Earnings were strong last quarter. B2Gold Corp beat our consensus estimate by 12.50%, and for the current fiscal year, BTG is expected to post earnings of $0.51 per share on revenue of $2.96 billion.
Shares of B2Gold Corp have gained 2.2% over the past month, and currently trade at a forward P/E of 6.32X and a P/CF of 7.42X.
The Mining - Gold industry is in the top 6% of all the industries we have in our universe, so it looks like there are some nice tailwinds for NGD and BTG, even beyond their own solid fundamental situation.
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New Gold Inc. (NGD): Free Stock Analysis Report B2Gold Corp (BTG): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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