Harmony Gold Mining (HMY) AI Stock Analysis

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Harmony Gold Mining

(NYSE:HMY)

76Outperform

Harmony Gold Mining's stock score reflects its solid financial performance, marked by growth and efficient cash flow management. The earnings call supports this with strong interim results and strategic initiatives for future growth. While technical indicators suggest mixed momentum, the company's valuation is fair, aligning with its robust financial health. Challenges such as increased costs and project delays are balanced by strategic investments and safety improvements.

Positive Factors

Dividends

Harmony declared a large dividend, which is a positive sign for shareholders.

Market Forecast

Analysts are bullish on gold, forecasting it to reach $3000/oz, which could benefit Harmony due to its operational gearing.

Production Guidance

Harmony is expected to reach the upper end of production guidance and underground grades are anticipated to increase ahead of guidance.

Negative Factors

Production Costs

Harmony Gold Mining Co. Ltd is a high-cost gold producer with a fourth quartile cost position, which means its production costs are higher compared to many peers.

Production Decline

Production is expected to decline due to lower output at Hidden Valley and Doornkop, leading to even higher costs.

Safety Record

Harmony's poor safety and fatality records compared to other producers may deter some investors from owning shares.

Harmony Gold Mining (HMY) vs. S&P 500 (SPY)

Market Cap

$9.08B

Dividend Yield0.71%

Average Volume (3M)7.00M

Price to Earnings (P/E)15.7

Beta (1Y)1.03

Revenue Growth20.35%

EPS Growth20.44%

CountryUS

Employees34,715

SectorBasic Materials

Sector Strength52

IndustryGold

Share Statistics

EPS (TTM)0.93

Shares Outstanding634,767,700

10 Day Avg. Volume7,500,951

30 Day Avg. Volume7,003,680

Financial Highlights & Ratios

PEG Ratio0.77

Price to Book (P/B)N/A

Price to Sales (P/S)2.39

Price to Cash Flow (P/CF)N/A

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$14.73

Price Target Upside-9.30% Downside

Rating ConsensusHold

Number of Analyst Covering1

Harmony Gold Mining Business Overview & Revenue Model

Company DescriptionHarmony Gold Mining Company Limited (HMY) is a South African-based gold mining and exploration company. It operates in the gold mining industry and engages in the production, mining, and exploration of gold, silver, and uranium. Harmony has operations in South Africa and Papua New Guinea and is one of the largest gold mining companies in South Africa. The company is committed to responsible mining practices and focuses on sustainable development, community engagement, and environmental stewardship.

How the Company Makes MoneyHarmony Gold Mining makes money primarily through the exploration, mining, and sale of gold and other precious metals. The company's revenue model is centered around the extraction and processing of gold ore, which is then refined and sold on global markets. Key revenue streams include the sale of gold bullion, as well as by-products such as silver and uranium, which are extracted during the gold mining process. Harmony Gold also benefits from strategic partnerships and joint ventures in various mining projects, which help to optimize costs and enhance production capabilities. The company's earnings can be significantly influenced by factors such as gold market prices, exchange rates, and operational efficiencies in mining and processing activities.

Harmony Gold Mining Financial Statement Overview

Summary

Harmony Gold Mining has exhibited strong financial performance characterized by substantial revenue growth and improved profitability margins. The balance sheet is robust with low leverage, and cash flow management is effective, indicating solid financial health despite the inherent risks of the mining industry.

Income Statement

Very Positive

Harmony Gold Mining has shown impressive revenue growth with a notable increase from 49.28 billion to 61.38 billion over the last year, marking a revenue growth rate of approximately 24.53%. The company also improved its profitability significantly with a net profit margin rising to 13.99% from 9.78% the previous year. Gross profit margin stands at 23.06%, indicating efficient cost management. Stability in EBIT and EBITDA margins at 19.02% and 28.04% respectively, further supports robust operational performance.

Balance Sheet

Positive

Harmony Gold's balance sheet shows strength in equity with a substantial increase to 40.77 billion, improving the equity ratio to 67.46%. The debt-to-equity ratio is low at 0.056, indicating minimal leverage risk. However, there is a potential risk with a debt level that could increase in future expansions. ROE improved to 21.06%, highlighting effective use of equity capital.

Cash Flow

Positive

The company demonstrated strong cash flow management, with a substantial increase in free cash flow to 7.25 billion, reflecting a free cash flow growth rate of 214.24%. The operating cash flow to net income ratio is high at 1.82, indicating efficient conversion of income into cash. However, the free cash flow to net income ratio is slightly lower at 0.84, suggesting room for improvement in free cash efficiency.

TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Breakdown
Income Statement		Total Revenue
66.96B	61.38B	49.27B	42.65B	41.73B	29.25B
	Gross Profit
22.30B	14.15B	9.74B	718.00M	6.08B	3.34B
	EBIT
16.75B	11.68B	7.09B	-755.00M	5.96B	-358.00M
	EBITDA
19.43B	17.21B	7.98B	3.34B	4.35B	2.40B
	Net Income Common Stockholders
10.52B	8.59B	4.82B	-1.05B	5.09B	-878.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
487.48M	4.69B	2.87B	2.45B	2.82B	6.36B
	Total Assets
37.30B	60.46B	57.24B	46.81B	49.50B	44.69B
	Total Debt
1.01B	2.29B	5.70B	3.21B	3.36B	7.72B
	Net Debt
524.41M	-2.40B	2.83B	757.00M	542.00M	1.36B
	Total Liabilities
7.70B	19.51B	22.36B	16.69B	17.82B	21.32B
	Stockholders Equity
29.60B	40.77B	34.76B	30.04B	31.63B	23.37B
Cash Flow		Free Cash Flow
9.50B	7.25B	2.31B	710.00M	4.04B	64.12M
	Operating Cash Flow
18.84B	15.65B	9.95B	6.92B	9.18B	272.08M
	Investing Cash Flow
-9.60B	-8.36B	-10.60B	-6.20B	-8.46B	-204.96M
	Financing Cash Flow
-3.24B	-5.43B	1.19B	-1.15B	-4.30B	248.00M

Harmony Gold Mining Technical Analysis

Technical Analysis Sentiment

Positive

Last Price16.24

Price Trends

50DMA

12.22

Positive

100DMA

10.69

Positive

200DMA

10.31

Positive

Market Momentum

MACD

0.81

Negative

RSI

80.80

Negative

STOCH

93.58

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HMY, the sentiment is Positive. The current price of 16.24 is above the 20-day moving average (MA) of 13.47, above the 50-day MA of 12.22, and above the 200-day MA of 10.31, indicating a bullish trend. The MACD of 0.81 indicates Negative momentum. The RSI at 80.80 is Negative, neither overbought nor oversold. The STOCH value of 93.58 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HMY.

Harmony Gold Mining Risk Analysis

Harmony Gold Mining disclosed 21 risk factors in its most recent earnings report. Harmony Gold Mining reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Harmony Gold Mining Peers Comparison

Overall Rating

UnderperformOutperform

Sector (47)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RGLD	78 Outperform	$10.83B	32.60	11.05%	1.00%	18.77%	38.55%
GFI	77 Outperform	$19.34B	15.49	25.35%	2.22%	13.41%	73.34%
AU	77 Outperform	$18.34B	15.60	19.42%	2.50%	26.43%	―
HMY	76 Outperform	$9.08B	15.72	25.19%	0.71%	20.35%	20.44%
CDE	70 Outperform	$3.57B	38.78	5.49%	―	27.30%	―
HL	67 Neutral	$3.34B	93.29	1.79%	0.80%	29.12%	―
Sector *	47 Neutral	$2.44B	-2.84	-22.09%	3.51%	4.02%	-28.91%

* Basic Materials Sector Average

Performance Comparison

HMY

Harmony Gold Mining

16.24

7.17

79.05%

CDE

Coeur Mining

5.49

0.85

18.32%

GFI

Gold Fields

23.40

5.68

32.05%

Hecla Mining Company

5.47

0.09

1.67%

RGLD

Royal Gold

170.97

52.33

44.11%

Anglogold Ashanti PLC

38.85

15.68

67.67%

Harmony Gold Mining Earnings Call Summary

Earnings Call Date: Mar 4, 2025 | % Change Since: 62.40% | Next Earnings Date: Aug 28, 2025

Earnings Call Sentiment Positive

The earnings call highlights significant achievements in production and financial performance, including record cash flows and dividends, strategic investments in high-grade assets, and improved safety metrics. However, challenges such as increased operating costs, production issues at Hidden Valley, and delays in the Wafi-Golpu project indicate areas requiring attention.

Highlights

Record Free Cash Flow Generation

Harmony generated record interim operating free cash flows of ZAR 10.4 billion (US$579 million), with an operating free cash flow margin of 29% as a result of high gold prices and quality ounces.

Increased Production and Earnings

Group production reached 800,000 ounces, with headline earnings per share growing by 33% to ZAR 12.70 per share (US$0.71 per share).

Strong Safety Improvements

Improvement in the lost time injury frequency rate to 5.52 and a loss of life injury frequency rate of 0.02.

Strategic Capital Allocation

Investment in high-grade projects and surface operations, including ZAR2 billion at Mponeng and Moab Khotsong and over ZAR1 billion at Mine Waste Solutions.

Robust Financial Performance

18% increase in group revenue to ZAR37 billion, driven by a 23% increase in the rand gold price. Net profit increased by 33% to ZAR7.9 billion.

Record Interim Dividend Payout

A record interim dividend payout of ZAR 1.4 billion was announced, reflecting strong cash flow generation.

Lowlights

Increased Operating Costs

Total cash operating costs in rand terms increased by 9% due to inflation and planned lower production at certain assets.

Production Challenges at Hidden Valley

Grades at Hidden Valley have seen a step down, with expectations of normalization to guided grades going forward.

Wafi-Golpu Project Delays

Continued delays in obtaining the special mining lease for Wafi-Golpu, with ongoing negotiations and permitting processes.

Company Guidance

In the recent call, Harmony Gold Mining Company presented an impressive set of interim results for the half-year ending December 31, 2024. The company reported an increase in underground recovered grades to 6.4 grams per tonne, surpassing their full-year guidance. Group production reached approximately 25,000 kilograms or 800,000 ounces, also exceeding guidance. All-in sustaining costs were well controlled at around ZAR 972,000 per kilogram or just under US$1,690 per ounce. Operating free cash flows hit a record ZAR 10.4 billion (US$579 million), contributing to an expanded free cash flow margin of 29%. The headline earnings per share grew by 33% to ZAR 12.70 (US$0.71), with a record interim dividend payout of ZAR 1.4 billion announced. The company's strategy focuses on safe, profitable production, with a significant emphasis on safety, operational excellence, and a balanced approach to capital allocation, including investments in higher-grade projects such as Mponeng and Moab Khotsong. The presentation also highlighted the company's commitment to long-term growth through strategic investments in gold and copper, with upcoming projects like Eva Copper and Wafi-Golpu expected to enhance profitability and diversify the asset portfolio.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.