Yahoo Finance Paringa Resources Limited (ASX:PNL) Is Expected To Breakeven
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Paringa Resources Limited’s (ASX:PNL): Paringa Resources Limited, together with its subsidiaries, engages in the exploration and development of mineral resource properties in the United States. The AU$60m market-cap company announced a latest loss of -US$7.1m on 30 June 2018 for its most recent financial year result. As path to profitability is the topic on PNL’s investors mind, I’ve decided to gauge market sentiment. I’ve put together a brief outline of industry analyst expectations for PNL, its year of breakeven and its implied growth rate.
View our latest analysis for Paringa Resources
PNL is bordering on breakeven, according to the 3 Oil and Gas analysts. They anticipate the company to incur a final loss in 2019, before generating positive profits of US$13m in 2020. So, PNL is predicted to breakeven approximately a few months from now. In order to meet this breakeven date, I calculated the rate at which PNL must grow year-on-year. It turns out an average annual growth rate of 84% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving PNL’s growth isn’t the focus of this broad overview, though, bear in mind that typically oil and gas companies, depending on the stage of operation and resource produced, have irregular periods of cash flow. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.
One thing I’d like to point out is that PNL has no debt on its balance sheet, which is rare for a loss-making oil and gas company, which typically has high debt relative to its equity. This means that PNL 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 PNL, so if you are interested in understanding the company at a deeper level, take a look at PNL’s company page on Simply Wall St. I’ve also compiled a list of key factors you should further examine:
Historical Track Record: What has PNL’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 Paringa 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.
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If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
