Northern Star Resources (ASX:NST) - Share price, News & Analysis

Q: What is the Fair Price of NST when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

NST (A$8.43) is trading below our estimate of [[fair value]] (A$10.46)

NST fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	3/6
Past Performance	4/6
Financial Health	3/6
Dividends	3/6

NST Stock Overview

Northern Star Resources Limited engages in the exploration, development, mining, and processing of gold deposits in Australia.

Rewards

Trading at 19.4% below our estimate of its fair value

Earnings are forecast to grow 8.23% per year

Earnings grew by 253.1% over the past year

Risk Analysis

Large one-off items impacting financial results

Northern Star Resources Competitors

Newcrest Mining

ASX:NCM

AU$17.3b

Evolution Mining

ASX:EVN

AU$5.0b

Perseus Mining

ASX:PRU

AU$2.3b

Silver Lake Resources

ASX:SLR

AU$1.4b

Price History & Performance

Summary of all time highs, changes and price drops for Northern Star Resources
Historical stock prices
Current Share Price	AU$8.43
52 Week High	AU$11.59
52 Week Low	AU$6.60
Beta	0.25
1 Month Change	23.97%
3 Month Change	-1.17%
1 Year Change	-8.87%
3 Year Change	-31.63%
5 Year Change	69.96%
Change since IPO	3,731.84%

Shareholder Returns

	NST	AU Metals and Mining	AU Market
7D	5.6%	3.8%	0.5%
1Y	-8.9%	-15.7%	-8.8%

Return vs Industry: NST exceeded the Australian Metals and Mining industry which returned -15.7% over the past year.

Return vs Market: NST matched the Australian Market which returned -8.8% over the past year.

Price Volatility

Is NST's price volatile compared to industry and market?
NST volatility
NST Average Weekly Movement	6.4%
Metals and Mining Industry Average Movement	12.2%
Market Average Movement	10.5%
10% most volatile stocks in AU Market	17.8%
10% least volatile stocks in AU Market	4.6%

Stable Share Price: NST is less volatile than 75% of Australian stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: NST's weekly volatility (6%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2000	3,383	Stuart Tonkin	https://www.nsrltd.com

Northern Star Resources Limited engages in the exploration, development, mining, and processing of gold deposits in Australia. It also sells refined gold. The company holds interests in the Pogo, Kalgoorlie, KCGM, Jundee, Thunderbox, and Carosue Dam operations, as well as Paulsens, Tanami, and Bronzewing projects.

Northern Star Resources Fundamentals Summary

How do Northern Star Resources's earnings and revenue compare to its market cap?
NST fundamental statistics
Market Cap	AU$9.65b
Earnings (TTM)	AU$1.11b
Revenue (TTM)	AU$3.46b

8.8x

P/E Ratio

2.8x

P/S Ratio

Is NST overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
NST income statement (TTM)
Revenue	AU$3.46b
Cost of Revenue	AU$3.42b
Gross Profit	AU$38.20m
Other Expenses	-AU$1.07b
Earnings	AU$1.11b

Last Reported Earnings

Dec 31, 2021

Next Earnings Date

Aug 28, 2022

Earnings per share (EPS)	0.95
Gross Margin	1.11%
Net Profit Margin	32.13%
Debt/Equity Ratio	3.7%

How did NST perform over the long term?

See historical performance and comparison

Dividends

2.4%

Current Dividend Yield

20%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is NST undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for NST?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for NST. This is calculated by dividing NST's market cap by their current preferred multiple.
What is NST's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	AU$9.65b

NST key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	2.8x
Enterprise Value/EBITDA	11.2x
PEG Ratio	1.1x

Price to Earnings Ratio vs Peers

How does NST's PE Ratio compare to its peers?

NST PE Ratio vs Peers

The above table shows the PE ratio for NST vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	17.1x
NCM Newcrest Mining	13.4x	-9.1%	AU$17.3b
EVN Evolution Mining	24.4x	20.2%	AU$5.0b
PRU Perseus Mining	12.3x	16.0%	AU$2.3b
SLR Silver Lake Resources	18.2x	24.0%	AU$1.4b
NST Northern Star Resources	8.8x	8.2%	AU$9.6b

Price-To-Earnings vs Peers: NST is good value based on its Price-To-Earnings Ratio (8.8x) compared to the peer average (17.1x).

Price to Earnings Ratio vs Industry

How does NST's PE Ratio compare vs other companies in the AU Metals and Mining Industry?

Price-To-Earnings vs Industry: NST is good value based on its Price-To-Earnings Ratio (8.8x) compared to the Australian Metals and Mining industry average (9.6x)

Price to Earnings Ratio vs Fair Ratio

What is NST's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

NST PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	8.8x
Fair PE Ratio	19.7x

Price-To-Earnings vs Fair Ratio: NST is good value based on its Price-To-Earnings Ratio (8.8x) compared to the estimated Fair Price-To-Earnings Ratio (19.7x).

Share Price vs Fair Value

What is the Fair Price of NST when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: NST (A$8.43) is trading below our estimate of fair value (A$10.46)

Significantly Below Fair Value: NST is trading below fair value, but not by a significant amount.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.

Discover undervalued companies

Future Growth

How is Northern Star Resources forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?

Future Growth Score

3/6

Future Growth Score 3/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

8.2%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: NST's forecast earnings growth (8.2% per year) is above the savings rate (1.8%).

Earnings vs Market: NST's earnings (8.2% per year) are forecast to grow faster than the Australian market (6.2% per year).

High Growth Earnings: NST's earnings are forecast to grow, but not significantly.

Revenue vs Market: NST's revenue (6.6% per year) is forecast to grow faster than the Australian market (6% per year).

High Growth Revenue: NST's revenue (6.6% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: NST's Return on Equity is forecast to be low in 3 years time (6.8%).

Discover growth companies

Past Performance

How has Northern Star Resources performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

44.1%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: NST has a large one-off gain of A$1.9B impacting its December 31 2021 financial results.

Growing Profit Margin: NST's current net profit margins (32.1%) are higher than last year (13.9%).

Past Earnings Growth Analysis

Earnings Trend: NST's earnings have grown significantly by 44.1% per year over the past 5 years.

Accelerating Growth: NST's earnings growth over the past year (253.1%) exceeds its 5-year average (44.1% per year).

Earnings vs Industry: NST earnings growth over the past year (253.1%) exceeded the Metals and Mining industry 57.3%.

Return on Equity

High ROE: NST's Return on Equity (13.6%) is considered low.

Discover strong past performing companies

Financial Health

How is Northern Star Resources's financial position?

Financial Health Score

3/6

Financial Health Score 3/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: NST's short term assets (A$1.4B) exceed its short term liabilities (A$712.0M).

Long Term Liabilities: NST's short term assets (A$1.4B) do not cover its long term liabilities (A$2.3B).

Debt to Equity History and Analysis

Debt Level: NST has more cash than its total debt.

Reducing Debt: NST's debt to equity ratio has increased from 0% to 3.7% over the past 5 years.

Debt Coverage: NST's debt is well covered by operating cash flow (428.2%).

Interest Coverage: Insufficient data to determine if NST's interest payments on its debt are well covered by EBIT.

Balance Sheet

Discover healthy companies

Dividend

What is Northern Star Resources's current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

2.37%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: NST's dividend (2.37%) isn’t notable compared to the bottom 25% of dividend payers in the Australian market (2.65%).

High Dividend: NST's dividend (2.37%) is low compared to the top 25% of dividend payers in the Australian market (6.33%).

Stability and Growth of Payments

Stable Dividend: NST's dividend payments have been volatile in the past 10 years.

Growing Dividend: NST's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (19.6%), NST's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonable cash payout ratio (66.3%), NST's dividend payments are covered by cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

5.8yrs

Average management tenure

CEO

Stuart Tonkin (46 yo)

5.83yrs

Tenure

AU$2,743,969

Compensation

Mr. Stuart Peter Tonkin, BEng (Hons) has been the Chief Executive Officer at Northern Star Resources Limited since October 29, 2016. He has been Managing Director and Director of Northern Star Resources Li...

CEO Compensation Analysis

Compensation vs Market: Stuart's total compensation ($USD1.95M) is about average for companies of similar size in the Australian market ($USD2.51M).

Compensation vs Earnings: Stuart's compensation has increased by more than 20% in the past year.

Leadership Team

Experienced Management: NST's management team is seasoned and experienced (5.8 years average tenure).

Board Members

Experienced Board: NST's board of directors are not considered experienced ( 1.5 years average tenure), which suggests a new board.

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/08/11 00:00
End of Day Share Price	2022/08/11 00:00
Earnings	2021/12/31
Annual Earnings	2021/06/30