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Altius Renewable Royalties Corp.'s (TSE:ARR) Path To Profitability

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With the business potentially at an important milestone, we thought we'd take a closer look at Altius Renewable Royalties Corp.'s (TSE:ARR) future prospects. Altius Renewable Royalties Corp., a renewable energy royalty company, invests in and acquires and manages portfolio of diversified renewable energy royalties for renewable power developers, operators, and originators. With the latest financial year loss of US$2.0m and a trailing-twelve-month loss of US$1.3m, the CA$292m market-cap company alleviated its loss by moving closer towards its target of breakeven. As path to profitability is the topic on Altius Renewable Royalties' investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

View our latest analysis for Altius Renewable Royalties

Altius Renewable Royalties is bordering on breakeven, according to the 6 Canadian Renewable Energy analysts. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$2.4m in 2023. Therefore, the company is expected to breakeven roughly 2 years 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 90% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

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

We're not going to go through company-specific developments for Altius Renewable Royalties given that this is a high-level summary, but, take into account that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one aspect worth mentioning. Altius Renewable Royalties currently has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which typically has high debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

There are key fundamentals of Altius Renewable Royalties 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 Altius Renewable Royalties, take a look at Altius Renewable Royalties' company page on Simply Wall St. We've also compiled a list of pertinent aspects you should further examine:

  1. Historical Track Record: What has Altius Renewable Royalties' 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 Altius Renewable Royalties' 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.

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