Yahoo Finance When Will Poseidon Nickel Limited (ASX:POS) Breakeven?
With the business potentially at an important milestone, we thought we'd take a closer look at Poseidon Nickel Limited's (ASX:POS) future prospects. Poseidon Nickel Limited engages in the exploration, mining, and production of mineral properties in Australia. The AU$22m market-cap company posted a loss in its most recent financial year of AU$11m and a latest trailing-twelve-month loss of AU$53m leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which Poseidon Nickel will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.
View our latest analysis for Poseidon Nickel
Poseidon Nickel is bordering on breakeven, according to some Australian Metals and Mining analysts. They expect the company to post a final loss in 2024, before turning a profit of AU$21m in 2025. The company is therefore projected to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 170% year-on-year, on average, which is rather optimistic! 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 Poseidon Nickel given that this is a high-level summary, however, keep 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. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.
Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 0.8% 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 too many aspects of Poseidon Nickel to cover in one brief article, but the key fundamentals for the company can all be found in one place – Poseidon Nickel's company page on Simply Wall St. We've also compiled a list of pertinent factors you should further examine:
Historical Track Record: What has Poseidon Nickel'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 Poseidon Nickel'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.
