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NOVAGOLD (NG) to Post Q3 Earnings: What's in the Cards?

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NOVAGOLD RESOURCES INC. (NG - Free Report) is set to release third-quarter 2019 results on Oct 1, after the closing bell.

In the last reported quarter, the company reported net loss per share of 2 cents, which came in line with the Zacks Consensus Estimate. The company has beaten the consensus mark in two of the trailing four quarters with an average positive surprise of 16.7%.

The stock has surged 60.2% year to date compared with the industry’s 39.6% rise.



Will the company deliver a surprise in the to-be-reported quarter or is it headed for a possible pullback? Let’s see how things are shaping up.

Factors at Play  

In June 2019, NOVAGOLD stated that one of its primary goals in 2019 is to continue advancing the Donlin Gold project toward a construction or production decision.

The company expects to spend roughly $13 million in 2019 for funding its share of expenditures in the project. Notably, it has spent $3.8 million for Donlin Gold project’s technical work, community engagement and permitting efforts for the first six months of 2019. Spending for the project is expected to increase in the second half of 2019, per the company. As such, higher expected spending may hurt the company’s margins in the to-be-reported quarter.

NOVAGOLD stated that it has sufficient cash and cash equivalents as well as term deposits for funding the Donlin Gold project. However, the company’s inability to generate operating cash flow is a concern.

What the Zacks Model Says

Our proven model does not show that NOVAGOLD is likely to beat estimates in the to-be-reported quarter. That is because a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as you will see below:

Earnings ESP: Earnings ESP for NOVAGOLD is 0.00%. The Most Accurate Estimate and the Zacks Consensus Estimate are both currently pegged at a loss of 2 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: NOVAGOLD carries a Zacks Rank #3, which when combined with a 0.00% ESP makes surprise prediction difficult.

Note that we caution against stocks with a Zacks Rank #4 (Sell) or #5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Novagold Resources Inc. Price and EPS Surprise

 

Novagold Resources Inc. Price and EPS Surprise

Novagold Resources Inc. price-eps-surprise | Novagold Resources Inc. Quote

 

Stocks Poised to Beat Estimates

Here are some companies that you may want to consider as our model shows that they have the right combination of elements to beat estimates in the upcoming quarter:

Brady Corporation (BRC - Free Report) has an Earnings ESP of +1.59% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Cintas Corporation (CTAS - Free Report) has an Earnings ESP of +0.16% and a Zacks Rank #2.

National Steel Company (SID - Free Report) has an Earnings ESP of +25.42% and carries a Zacks Rank #3.

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