Yahoo Finance When Will OreCorp Limited (ASX:ORR) Breakeven?
We feel now is a pretty good time to analyse OreCorp Limited's (ASX:ORR) business as it appears the company may be on the cusp of a considerable accomplishment. OreCorp Limited, together with its subsidiaries, operates as a mineral exploration company in Australia. On 30 June 2023, the AU$211m market-cap company posted a loss of AU$19m for its most recent financial year. Many investors are wondering about the rate at which OreCorp will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
See our latest analysis for OreCorp
Expectations from some of the Australian Metals and Mining analysts is that OreCorp is on the verge of breakeven. They expect the company to post a final loss in 2025, before turning a profit of AU$187m in 2026. Therefore, the company is expected to breakeven roughly 3 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 86% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
We're not going to go through company-specific developments for OreCorp given that this is a high-level summary, however, 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.
One thing we’d like to point out is that OreCorp 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.
Next Steps:
There are too many aspects of OreCorp to cover in one brief article, but the key fundamentals for the company can all be found in one place – OreCorp's company page on Simply Wall St. We've also put together a list of key aspects you should further examine:
Valuation: What is OreCorp 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 OreCorp 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 OreCorp’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.
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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.
