With Gold Prices Rising, Is Kinross Gold Corp. (KGC) a Buy?

Gold’s unstoppable rally is again capturing investors’ attention, with prices soaring to record highs in early 2025. The precious metal recently breached the $2,848 per ounce mark, driven by escalating geopolitical tensions and economic uncertainty. China’s retaliatory measures against fresh U.S. tariffs have further fueled safe-haven demand, reinforcing gold’s reputation as a hedge against inflation and market volatility.

With major banks, including Citi, forecasting gold to potentially hit $3,000 per ounce this year, the bullish momentum shows no signs of slowing. Meanwhile, data from the World Gold Council showed that global gold demand hit a record 4,974.5 metric tons in 2024, fueled by rising investment interest and aggressive central bank purchases. With such strong tailwinds, gold stocks are gaining traction among investors looking to capitalize on the boom.

Against this backdrop, Kinross Gold Corporation (KGC), a leading gold producer with operations across the U.S., Canada, and South America, has been reaping the benefits. The stock has soared 21.8% in just a month and delivered an impressive return of 120.6% over the past year, closing the last trading session at $11.91. But is there still room for growth, or has KGC already struck gold?

Let’s take a closer look at the factors that could propel its performance even further.

Sound Historical Growth

Over the past three years, KGC has demonstrated consistent growth across key financial metrics. Its revenue grew at a CAGR of 15.1%, while EBITDA rose at a 14.4% CAGR. Tangible book value and total assets expanded marginally at CAGRs of 0.6% and 1.1%, respectively.

Additionally, KGC’s levered free cash flow improved at an impressive CAGR of 130.6% over the same time frame.

Strong Financials

For the fiscal 2024 third quarter that ended September 30, KGC’s revenues increased 29.9% year-over-year to $1.43 billion. Its gross profit improved 103.1% from the year-ago value to $645.60 million. The company’s operating earnings grew 142.1% from the prior year’s quarter to $547.70 million.

In addition, its adjusted net earnings attributable to common shareholders increased 106.6% year-over-year to $298.70 million. Meanwhile, adjusted earnings per common share attributable to common shareholders doubled from the previous year’s period to $0.24.

As of September 30, 2024, KGC’s cash and cash equivalents amounted to $472.80 million, compared to $352.40 million recorded on December 31, 2023.

Favorable Analyst Estimates

The consensus revenue estimate of $1.47 billion for the fiscal fourth quarter (ended December 2024) represents a 31.5% increase year-over-year. The consensus EPS estimate of $0.25 for the same period indicates a 124.9% improvement year-over-year. The company has an excellent surprise history, surpassing the consensus revenue and EPS estimates in each of the trailing four quarters.

For the fiscal year that ended on December 31, 2024, the company’s EPS is anticipated to grow 68.5% year-over-year to $0.74, while its revenue is expected to increase 21.4% from the prior year period to $5.15 billion.

In addition, Street expects its revenue and EPS for fiscal year 2025 to grow 6.5% and 22.8%, respectively, from the same period last year to $5.48 billion and $0.91.

High Profitability

KGC’s trailing-12-month gross profit margin of 54.54% is 87.5% higher than the industry average of 29.09%. Its trailing-12-month EBITDA margin stands at 46.80%, 179.8% above the industry average of 16.73%.

In addition, the company boasts a trailing-12-month net income margin of 15.23%, which is considerably higher than the sector average of 4.71%. Also, the stock’s trailing-12-month ROCE of 11.63% outperforms the industry average of 5.91% by 96.7%.

POWR Ratings Reflects Optimism

KGC’s sound fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, which equates to a Strong Buy in our proprietary rating system. The POWR Ratings are calculated by taking into account 118 different factors, with each factor weighted to an optimal degree.

Our proprietary rating system also evaluates each stock based on eight distinct categories. KGC boasts an A grade for Growth, consistent with its solid financial performance in the last reported quarter. The stock also has an A grade for Quality, supported by profitability measures that exceed industry benchmarks.

Furthermore, its B grade for Sentiment is in line with the optimistic analyst estimates. Within the Miners - Gold industry, KGC is ranked #3 out of 41 stocks.

Beyond what is stated above, we have also given KGC grades for Value, Momentum, and Stability. Get all KGC ratings here.

Bottom Line

With gold prices hitting record highs and global demand continuing to rise, the gold market is experiencing unprecedented momentum. In 2024, the market’s total value soared to $382 billion, with the fourth quarter alone accounting for $111 billion. Looking ahead, gold production is projected to grow from 4.75 kilotons in 2025 to 6.78 kilotons by 2030, at a CAGR of 7.4%. This sustained growth signals strong long-term potential for companies operating in the sector.

Considering KGC’s high profitability, strong financials, optimistic analyst estimates, and strategic market position, now might be the ideal time to consider adding the stock to one’s investment portfolio.

How Does Kinross Gold Corporation (KGC) Stack Up Against Its Peers?

Although KGC’s near-term outlook appears sound, it may be worthwhile to explore its industry peers, who also exhibit even stronger POWR Ratings. So, consider these A (Strong Buy) rated stocks from the Miners - Gold industry: Dundee Precious Metals Inc. (DPMLF), OceanaGold Corporation (OCANF), and Lundin Gold Inc. (LUGDF).

To explore more A or B-rated gold miner stocks, click here.

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KGC shares . Year-to-date, KGC has gained 28.48%, versus a 3.45% rise in the benchmark S&P 500 index during the same period.

Shweta's profound interest in financial research and quantitative analysis led her to pursue a career as an investment analyst. She uses her knowledge to help retail investors make educated investment decisions.

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