Kinross Gold (TSX:K) has experienced a significant 18.5% increase in its stock price over the last month as of writing. This prompted investors to question whether now is the right time to invest. So, of course, today we will analyze the company's recent performance, financial health, market sentiment, and future outlook — all in the name of figuring out whether now is the time to buy or if the best is behind Kinross stock.

Earnings performance

First, we'll check out earnings for Kinross stock. Kinross reported strong first-quarter results for 2024. The company posted earnings of $0.14 per share, beating the consensus estimate of $0.08. This marks a substantial improvement from the previous year's earnings.

Kinross generated $1.46 billion in revenue, exceeding analyst expectations of $1.19 billion. This 16% year-over-year increase was driven by higher production volumes and better metal prices. Furthermore, the company produced 527,399 gold equivalent ounces (Au eq. oz.) in Q1 2024, up from 466,022 Au eq. oz. in the first quarter (Q1) of 2023. This was in part thanks to higher throughput at Tasiast, higher grades at La Coipa, and increased production at Bald Mountainâ.

Kinrossâs margin per Au eq. oz. sold rose by 20% to $1,088, compared to $907 in Q1 2023. This outpaced the 9% increase in the average realized gold priceâ. Finally, Kinross's operational efficiency continues to be a strong point. The production cost of sales per Au eq. oz. sold decreased slightly to $982 compared to $987 in Q1 2023ââ. This reflects the companyâs ongoing efforts to manage costs effectively.

Strong finances

Now, let's look at how the company continues to balance the books. Kinross maintains a robust balance sheet with $406.9 million in cash and cash equivalents as of March 31, 2024, up from $352.4 million at the end of 2023. This improvement is largely due to increased operating cash flow.

The company has been actively reducing its debt, aiming to strengthen its investment-grade balance sheet further. Kinross plans to allocate excess free cash flow towards reducing its term loan due in 2025, which will enhance its financial stabilityâ.

As for the dividend, Kinross declared a quarterly dividend of US$0.03 per share, maintaining its commitment to returning value to shareholders. Therefore, you can grab it today for an annual dividend of $0.16, at a yield of 1.34% as of writing.

Valuation

All this is great, but is it still fairly valued? Let's get into the company's metrics. Kinross has a current price-to-earnings (P/E) ratio of 24.8, which is higher than its historical averages. This suggests that the market is optimistic about Kinrossâs future earnings growth. However, it also implies that the stock might be overvalued compared to its historical norms.

Meanwhile, analysts have a mixed outlook on Kinross. While the companyâs strong operational performance and financial discipline are viewed positively, some concerns have been raised about the decline in reserves per shareâ. Additionally, unusual bearish options activity has been noted, indicating potential short-term volatility.

Looking ahead

So, let's take a look at the company's future outlook. For Q2 2024, earnings per share estimates range from $0.08 to $0.19, with an average estimate of $0.14ââ. Kinross's ability to meet or exceed these estimates will be critical in sustaining investor confidence.

Kinross is focused on maximizing free cash flow through operational excellence and financial discipline. Upcoming events, such as the Q2 2024 results conference call scheduled for Aug. 1, will provide further insights into the company's strategic direction and operational performance.

A key area of concern to watch will be the declining reserves per share. This could impact long-term production capabilities and investor confidenceâ. Additionally, fluctuations in gold prices and potential operational disruptions are risks that investors should consider.

Bottom line

Kinross Gold has shown strong recent performance and maintains a solid financial position. However, its high valuation and declining reserves per share present some risks. The upcoming Q2 2024 earnings release will be a critical indicator of the company's future performance.

For risk-tolerant investors, Kinross offers growth potential supported by its operational efficiency and financial discipline. However, more conservative investors might want to wait for the Q2 results and further clarity on long-term reserves before making an investment decision.

The post Kinross Stock Rose 19% Last Month: Is it Still a Buy in August? appeared first on The Motley Fool Canada.