Is Gold Fields Ltd ADR (GFI) overvalued?
On Equity Rank's model estimate, GFI trades 26% below its fair value. Gold Fields Ltd ADR (GFI) last closed at $39.17; the multi-method model fair value is $53.27.
| Price | Model fair value | Price vs model |
|---|---|---|
| $39.17 | $53.27 | 27% below |
What the answer rests on
- 7 of 12 valuation methods put GFI's value above its price and 5 put it below, so the methods disagree.
- To justify today's price, GFI's free cash flow would need to grow about -2.7% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew 71.9% a year.
- GFI trades at 7.5 times its last year's earnings, against a median of 12.4 for 36 profitable Mining companies.
- Over the past year the price sat below the model fair value on 100% of trading days. The gap ranged from 33% below to 10% below the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind GFI's fair value · What prices assume · Other companies