Yahoo Finance Atlantic Lithium Limited (LON:ALL): Is Breakeven Near?
With the business potentially at an important milestone, we thought we'd take a closer look at Atlantic Lithium Limited's (LON:ALL) future prospects. Atlantic Lithium Limited engages in the exploration and development of mineral properties in West Africa. With the latest financial year loss of AU$12m and a trailing-twelve-month loss of AU$14m, the UK£126m market-cap company amplified its loss by moving further away from its breakeven target. The most pressing concern for investors is Atlantic Lithium's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.
View our latest analysis for Atlantic Lithium
Consensus from 4 of the British Metals and Mining analysts is that Atlantic Lithium is on the verge of breakeven. They anticipate the company to incur a final loss in 2025, before generating positive profits of AU$25m in 2026. The company is therefore projected to breakeven around 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 65% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, we won’t go into details of Atlantic Lithium's upcoming projects, however, take into account that typically metals and mining companies, depending on the stage of operation and metals mined, have irregular periods of cash flow. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing we’d like to point out is that Atlantic Lithium has no debt on its balance sheet, which is quite unusual for a cash-burning metals and mining company, which usually has a high level of debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.
Next Steps:
There are too many aspects of Atlantic Lithium to cover in one brief article, but the key fundamentals for the company can all be found in one place – Atlantic Lithium's company page on Simply Wall St. We've also compiled a list of key factors you should further research:
Valuation: What is Atlantic Lithium 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 Atlantic Lithium 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 Atlantic Lithium’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.
