Yahoo Finance Breakeven On The Horizon For Calidus Resources Limited (ASX:CAI)
With the business potentially at an important milestone, we thought we'd take a closer look at Calidus Resources Limited's (ASX:CAI) future prospects. Calidus Resources Limited engages in the exploration and exploitation of gold minerals in Australia. On 30 June 2021, the AU$218m market-cap company posted a loss of AU$4.8m for its most recent financial year. Many investors are wondering about the rate at which Calidus Resources 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.
Check out our latest analysis for Calidus Resources
Calidus Resources is bordering on breakeven, according to some Australian Metals and Mining analysts. They expect the company to post a final loss in 2022, before turning a profit of AU$68m in 2023. So, the company is predicted to breakeven approximately 2 years 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 141%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
We're not going to go through company-specific developments for Calidus Resources given that this is a high-level summary, though, keep in mind that generally a metal and mining business has lumpy cash flows which are contingent on the natural resource mined and stage at which the company is operating. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.
Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 23% 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 Calidus Resources 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 Calidus Resources, take a look at Calidus Resources' company page on Simply Wall St. We've also put together a list of important factors you should look at:
Valuation: What is Calidus Resources 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 Calidus Resources 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 Calidus Resources’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.
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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