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First Cobalt Corp. (CVE:FCC) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. First Cobalt Corp. acquires and explores for resource properties in the United States and Canada. The CA$155m market-cap company posted a loss in its most recent financial year of CA$2.4m and a latest trailing-twelve-month loss of CA$7.5m leading to an even wider gap between loss and breakeven. As path to profitability is the topic on First Cobalt's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.
First Cobalt is bordering on breakeven, according to the 3 Canadian Metals and Mining analysts. They anticipate the company to incur a final loss in 2022, before generating positive profits of CA$36m in 2023. So, the company is predicted to breakeven approximately 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 104% year-on-year, on average, which is extremely buoyant. 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 First Cobalt's upcoming projects, though, keep in mind that by and large 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. First Cobalt currently has no debt on its balance sheet, which is rare for a loss-making 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.
There are too many aspects of First Cobalt to cover in one brief article, but the key fundamentals for the company can all be found in one place – First Cobalt's company page on Simply Wall St. We've also put together a list of key factors you should look at:
Valuation: What is First Cobalt 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 First Cobalt 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 First Cobalt’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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