Yahoo Finance Adriatic Metals PLC (ASX:ADT): When Will It Breakeven?
We feel now is a pretty good time to analyse Adriatic Metals PLC's (ASX:ADT) business as it appears the company may be on the cusp of a considerable accomplishment. Adriatic Metals PLC, through its subsidiaries, engages in the exploration and development of precious and base metals. The AU$867m market-cap company posted a loss in its most recent financial year of US$14m and a latest trailing-twelve-month loss of US$17m leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which Adriatic Metals will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.
View our latest analysis for Adriatic Metals
Adriatic Metals is bordering on breakeven, according to the 5 Australian Metals and Mining analysts. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$27m in 2023. So, the company is predicted to breakeven just over a year from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 87%, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Given this is a high-level overview, we won’t go into details of Adriatic Metals' upcoming projects, however, keep in mind that generally metals and mining companies, depending on the stage of operation and metals mined, have irregular periods of cash flow. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 11% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
Next Steps:
There are key fundamentals of Adriatic Metals which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Adriatic Metals, take a look at Adriatic Metals' company page on Simply Wall St. We've also put together a list of essential factors you should look at:
Valuation: What is Adriatic Metals worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Adriatic Metals is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Adriatic Metals’s board and the CEO’s background.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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