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Market Sentiment Around Loss-Making Piedmont Lithium Inc. (ASX:PLL)

Piedmont Lithium Inc. (ASX:PLL) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Piedmont Lithium Inc., a development stage company, engages in the exploration and development of resource projects in the United States. With the latest financial year loss of US$22m and a trailing-twelve-month loss of US$37m, the AU$417m market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on Piedmont Lithium'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.

Check out our latest analysis for Piedmont Lithium

Consensus from 6 of the Australian Metals and Mining analysts is that Piedmont Lithium is on the verge of breakeven. They expect the company to post a final loss in 2024, before turning a profit of US$16m in 2025. The company is therefore projected to breakeven just over a year 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 104% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
earnings-per-share-growth

Given this is a high-level overview, we won’t go into details of Piedmont Lithium's upcoming projects, however, take into account that by and large 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.

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Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 0.1% 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 Piedmont Lithium 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 Piedmont Lithium, take a look at Piedmont Lithium's company page on Simply Wall St. We've also compiled a list of pertinent aspects you should look at:

  1. Historical Track Record: What has Piedmont Lithium'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.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Piedmont Lithium's board and the CEO’s background.

  3. 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.