Is Newmont (NEM) a Sustainable Long-Term Buy Amid a Booming Gold Cycle?

The gold sector is experiencing a tailwind-driven renaissance, fueled by geopolitical uncertainties, inflationary pressures, and surging central bank demand. Against this backdrop, Newmont Corporation (NEM) has emerged as a standout performer, leveraging its operational excellence and strategic financial management to outpace peers and deliver robust returns. With record cash flows, a near-zero debt balance, and valuation metrics that suggest undervaluation, Newmont appears poised to capitalize on the current gold cycle while offering long-term sustainability for investors.

Record Cash Flow and Financial Resilience

Newmont's third-quarter 2025 results underscore its dominance in the gold sector. The company generated a record free cash flow of $1.6 billion for the quarter, propelling its annual total to $4.5 billion with one quarter remaining according to Q3 results. This achievement is underpinned by $2.3 billion in cash flow from operations and a $5.6 billion cash and equivalents balance, reflecting a balance sheet fortified by disciplined cost management and operational efficiency as reported in the official announcement.

Notably, Newmont has retired $2 billion in debt since the beginning of 2025, reducing leverage to near-zero levels according to financial reports. This strategic deleveraging not only enhances financial flexibility but also positions the company to withstand potential volatility in gold prices. Shareholders have also benefited, with $823 million returned through dividends and buybacks since the last earnings call according to the Q3 earnings release. Such capital allocation practices reinforce Newmont's commitment to long-term value creation.

Outperformance vs. Peers and Zacks Rank Validation

Newmont's outperformance extends beyond its financials. Year-to-date, its stock has surged 167.1%, far outpacing the 29.8% gain of the broader Zacks Basic Materials sector and the 147.8% rise of its gold sector peers as of Q3 2025 financials. This exceptional performance has earned Newmont a Zacks Rank of #1 (Strong Buy), a designation reserved for companies with favorable earnings estimate revisions and near-term growth potential as confirmed in the financial analysis.

A comparison with peer Agnico Eagle Mines (AEM), another Zacks #1-ranked gold miner, further highlights Newmont's advantages. While both companies share a Strong Buy rating, Newmont's Value Score of C (fairly valued) contrasts with Agnico's Value Score of D (undervalued but with higher risk), suggesting Newmont offers a more balanced risk-reward profile as reported in the sector analysis.

Attractive Valuation Metrics

From a valuation perspective, Newmont's stock appears compellingly priced. It trades at a forward P/E of 16.4X, below the gold sector peer average of 17.6X according to market data. Similarly, its trailing cash flow multiple of 17.1X lags the peer average of 21X, indicating stronger relative value. Perhaps most telling is its PEG ratio of 0.69, a metric that signals undervaluation relative to projected earnings growth as shown in financial analysis.

These metrics suggest Newmont is not merely riding the gold price wave but is fundamentally undervalued, offering upside potential even if the current cycle moderates. For investors, this represents a rare combination of growth and affordability in a sector historically prone to volatility.

Conclusion: A Compelling Case for Immediate Investment

Newmont's record cash flow, debt reduction, and shareholder-friendly policies, coupled with its favorable valuation and Zacks Rank, make it a standout in the gold sector. As the industry navigates a tailwind-rich environment, Newmont's operational discipline and strategic financial management position it as a sustainable long-term buy. For investors seeking exposure to the gold cycle without overpaying for risk, Newmont offers a rare alignment of momentum and value.