ioneer Ltd (ASX:INR) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. ioneer Ltd explores for and develops mineral properties in North America. The AU$1.4b market-cap company posted a loss in its most recent financial year of AU$10m and a latest trailing-twelve-month loss of AU$11m leading to an even wider gap between loss and breakeven. As path to profitability is the topic on ioneer's investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
According to the 3 industry analysts covering ioneer, the consensus is that breakeven is near. They expect the company to post a final loss in 2024, before turning a profit of AU$111m in 2025. The company is therefore projected to breakeven around 3 years from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 68% is expected, which is rather optimistic! 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 ioneer's upcoming projects, though, bear 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. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before we wrap up, there’s one aspect worth mentioning. ioneer currently has no debt on its balance sheet, which is rare for a loss-making metals and mining company, which typically has high 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.
This article is not intended to be a comprehensive analysis on ioneer, so if you are interested in understanding the company at a deeper level, take a look at ioneer's company page on Simply Wall St. We've also put together a list of important factors you should further examine:
Valuation: What is ioneer 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 ioneer 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 ioneer’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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