New Gold (NGD) AI Stock Analysis

• Market Cap: C$3.43B
• Dividend Yield: N/A
• Average Volume (3M): 1.82M
• Price to Earnings (P/E): 24.6
• Beta (1Y): 1.95
• Revenue Growth: 18.32%
• EPS Growth: N/A
• Country: CA
• Employees: 1,542
• Sector: Basic Materials
• Sector Strength: 63
• Industry: Mining
• EPS (TTM): 0.17
• Shares Outstanding: 791,300,000
• 10 Day Avg. Volume: 1,592,497
• 30 Day Avg. Volume: 1,824,581
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 2.40
• Price to Cash Flow (P/CF): 5.10
• P/FCF Ratio: 5.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$5.34
• Price Target Upside: 23.37% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5

New Gold demonstrates a promising financial recovery with improved profitability and strong cash flow management. Technical indicators suggest a stable underlying trend, although with some short-term caution. While the stock's valuation is high, the optimistic earnings call guidance for increased production and reduced costs supports a positive growth outlook. This positions New Gold for potential future gains, though investors should be aware of the current high valuation and absence of dividends.

Positive Factors

Earnings

NGD reported third-quarter adjusted EPS of $0.08/sh, beating ours and consensus estimates of $0.05/sh and $0.04/sh.

Operational Performance

NGD announced the completion of significant production milestones at New Afton and Rainy River.

Negative Factors

Production Guidance

Management has lowered FY24 production guidance from 310koz-350koz to 300koz-310koz.

New Gold Business Overview & Revenue Model

Company Description

New Gold Inc. (NGD) is a Canadian-focused intermediate gold mining company engaged in the development and operation of mineral properties. The company's core assets consist of the Rainy River gold-silver mine in Ontario, the New Afton copper-gold mine in British Columbia, and the Cerro San Pedro gold-silver mine in Mexico, which is in reclamation. New Gold is dedicated to responsible mining, focusing on safety, sustainability, and the creation of value for its stakeholders.

How the Company Makes Money

New Gold Inc. generates its revenue primarily through the extraction and sale of gold, silver, and copper. The company's revenue model is based on the production output from its mining operations, where gold is the predominant metal produced. Revenue is influenced by factors such as metal prices, production volumes, and operational efficiencies. The company also engages in forward sales and hedging contracts to mitigate market price volatility, which can impact revenue stability. Strategic partnerships and joint ventures in exploration and production activities further contribute to its revenue streams by expanding its resource base and optimizing operational costs.

New Gold Financial Statement Overview

Summary

New Gold showcases a strong financial turnaround with notable improvements in revenue growth and profitability. The balance sheet reflects moderate leverage, but asset management has room for enhancement. Despite high capital expenditures, cash flow metrics indicate robust cash management and operational efficiency.

Income Statement

New Gold has shown a strong revenue growth of 17.57% in the latest year, indicating positive sales momentum. Gross Profit Margin for 2024 stands at 26.03%, while Net Profit Margin improved significantly from negative in 2023 to 11.10% in 2024. The EBIT and EBITDA margins are 19.71% and 36.67%, respectively, reflecting improved operational efficiency and profitability. The company has effectively turned around its performance, moving from a net loss to a positive income, showcasing resilience and strong recovery.

Balance Sheet

The company maintains a healthy equity position with a Debt-to-Equity Ratio of 0.38, indicating moderate leverage. Return on Equity has improved significantly to 9.75%, a positive indicator of shareholder value creation. However, the Equity Ratio stands at 52.52%, which is reasonable but suggests room for improvement in asset management. The reduction in cash reserves is a potential risk, but overall balance sheet stability supports the company’s financial health.

Cash Flow

New Gold has demonstrated strong cash flow management with a Free Cash Flow growth rate of 460.37% over the past year. The Operating Cash Flow to Net Income ratio is 3.83, highlighting efficient cash generation relative to income. The Free Cash Flow to Net Income ratio of 1.19 indicates that the company is successfully converting income into cash, supporting its operational and strategic initiatives. Despite high capital expenditures, the company has managed to improve its cash flow significantly.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
924.50M	786.50M	604.40M	745.50M	643.40M
	Gross Profit
240.70M	336.10M	78.10M	172.50M	110.40M
	EBIT
182.30M	61.80M	-18.40M	137.30M	81.40M
	EBITDA
339.10M	182.90M	177.50M	322.90M	167.70M
	Net Income Common Stockholders
102.60M	-64.50M	-66.80M	140.60M	-79.30M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
110.30M	192.60M	236.40M	541.00M	231.70M
	Total Assets
2.00B	2.29B	2.24B	2.48B	2.25B
	Total Debt
399.70M	401.20M	396.20M	501.70M	508.70M
	Net Debt
294.50M	215.70M	195.40M	20.20M	322.40M
	Total Liabilities
951.50M	1.50B	1.28B	1.52B	1.46B
	Stockholders Equity
1.05B	789.20M	959.50M	955.90M	789.30M
Cash Flow		Free Cash Flow
121.70M	21.70M	-102.20M	76.40M	10.60M
	Operating Cash Flow
392.80M	287.60M	190.70M	323.70M	294.80M
	Investing Cash Flow
-263.40M	-234.00M	-281.90M	57.40M	-173.20M
	Financing Cash Flow
-207.80M	-68.60M	-185.00M	-86.50M	-21.90M

New Gold Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 4.33
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:NGD, the sentiment is Positive. The current price of 4.33 is above the 20-day moving average (MA) of 4.09, above the 50-day MA of 4.05, and above the 200-day MA of 3.62, indicating a bullish trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 58.43 is Neutral, neither overbought nor oversold. The STOCH value of 78.39 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:NGD.

New Gold Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AEM	80 Outperform	$72.92B	26.99	9.42%	1.65%	26.99%	-6.63%
K	75 Outperform	C$19.78B	14.42	14.66%	1.14%	16.53%	206.89%
ABX	74 Outperform	$45.98B	15.66	9.00%	2.23%	15.40%	72.49%
ELD	74 Outperform	C$4.26B	10.69	8.12%	―	27.29%	―
NGD	66 Neutral	C$3.43B	24.62	11.14%	―	18.32%	―
Sector *	46 Neutral	$2.64B	-3.89	-29.36%	3.33%	2.89%	-29.66%
G	27 Underperform	$85.93M	―	-24.84%	―	―	-128.74%

New Gold Corporate Events

New Gold Appoints Travis Murphy as Vice President of Operations

New Gold Inc. has appointed Travis Murphy as Vice President of Operations, effective March 24, 2025. Murphy, a seasoned mining professional with over 18 years of experience, is expected to enhance New Gold’s operational leadership with his strategic planning and values-based leadership. His previous roles at Newmont and Pretivm Resources, along with his commitment to safety, align with New Gold’s objectives of delivering safe production and achieving free cash flow goals.

New Gold Prices $400 Million Senior Notes to Optimize Debt Structure

New Gold Inc. has announced the pricing of a $400 million offering of 6.875% Senior Notes due in 2032. The net proceeds from this offering, along with cash on hand, will be used to fund the purchase of its outstanding 7.50% senior notes due in 2027. This financial maneuver is part of a tender offer to purchase any and all of the existing notes, which is contingent upon the successful completion of the new notes offering. This strategic move is expected to optimize New Gold’s debt structure and potentially improve its financial flexibility, which could have positive implications for its stakeholders and market positioning.

New Gold Launches $400 Million Senior Notes Offering

New Gold Inc. has announced a $400 million senior notes offering to fund a tender offer for its outstanding 7.50% senior notes due 2027. The proceeds will be used to purchase existing notes and cover related expenses, with any remaining funds used to redeem outstanding notes. This financial maneuver is part of New Gold’s strategy to manage its debt obligations and strengthen its financial position, potentially impacting its market standing and providing reassurance to stakeholders.

New Gold Announces Tender Offer for 7.50% Senior Notes

New Gold Inc. has announced a cash tender offer to purchase any and all of its outstanding 7.50% senior notes due 2027. This move is part of a broader financial strategy that includes a potential redemption of untendered notes and a contemporaneous notes offering to fund the tender offer and related expenses. The tender offer is set to expire on March 13, 2025, with settlement expected shortly thereafter. This initiative may impact the company’s financial structure and stakeholder interests, depending on the success of the notes offering and the tender offer’s outcome.

New Gold Exceeds Cost Guidance, Boosts Cash Flow and Ownership in 2024

New Gold Inc. reported strong financial results for the fourth quarter and full year 2024, surpassing its guidance on all-in sustaining costs and achieving robust free cash flow. The company produced 298,303 ounces of gold at all-in sustaining costs of $1,239 per ounce, below the lower end of its guidance. Despite challenges late in the year, New Gold maintained solid cash flow while investing in growth projects that are expected to boost future production. The company increased its ownership interest in the New Afton project to 80.1% by repurchasing a stake from the Ontario Teachers’ Pension Plan.

New Gold Extends Mine Life and Projects Strong Cash Flow

New Gold Inc. has announced mine life extensions for its New Afton and Rainy River mines, projecting strong free cash flow over the next three years. The company has increased its mineral reserves, particularly at New Afton, with significant improvements in both copper and gold reserves without additional capital costs. The expansion at Rainy River is set to extend the open pit mine life, ensuring continuous mill operations until 2029. These developments are expected to increase production, reduce costs, and support long-term growth opportunities, thereby strengthening New Gold’s market position.

New Gold Announces Management Change, Eyes Future Growth

New Gold Inc. announced a senior management change as Yohann Bouchard, Executive Vice President and Chief Operating Officer, has departed the company effective January 31, 2025. This transition is seen as an opportunity for new operational leadership, with President & CEO Patrick Godin expressing excitement about presenting the company’s operational outlook and updated technical reports, which will highlight the company’s ability to maximize free cash flow generation in the upcoming years.

New Gold Reports Record Production Quarter Amid Strategic Advancements

New Gold Inc. reported its highest production quarter for 2024, with significant achievements at its New Afton and Rainy River mines. New Afton exceeded its gold production guidance, despite Rainy River facing operational challenges in December. The company plans to release updated technical reports to demonstrate its strategies for increased production and cost efficiency. Overall, New Gold’s 2024 gold production was slightly below its updated guidance, while copper production met expectations, with costs expected to be at the low end of the guidance range.