Yahoo Finance Loss-Making Panoramic Resources Limited (ASX:PAN) Expected To Breakeven
Panoramic Resources Limited’s (ASX:PAN): Panoramic Resources Limited, together with its subsidiaries, engages in the exploration, evaluation, and development of mineral properties. The AU$252m market-cap company announced a latest loss of -AU$41m on 30 June 2018 for its most recent financial year result. Many investors are wondering the rate at which PAN will turn a profit, with the big question being “when will the company breakeven?” Below I will provide a high-level summary of the industry analysts’ expectations for PAN.
See our latest analysis for Panoramic Resources
According to the industry analysts covering PAN, breakeven is near. They expect the company to post a final loss in 2019, before turning a profit of AU$57m in 2020. PAN is therefore projected to breakeven around a couple of months from now! What rate will PAN have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 88%, which signals high confidence from analysts. If this rate turns out to be too aggressive, PAN may become profitable much later than analysts predict.
I’m not going to go through company-specific developments for PAN given that this is a high-level summary, but, keep in mind that typically 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, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
Before I wrap up, there’s one aspect worth mentioning. PAN 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 PAN 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:
This article is not intended to be a comprehensive analysis on PAN, so if you are interested in understanding the company at a deeper level, take a look at PAN’s company page on Simply Wall St. I’ve also put together a list of key factors you should further examine:
Historical Track Record: What has PAN’s performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Panoramic Resources’s board and the CEO’s back ground.
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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
