Yahoo Finance Amaroq Minerals Ltd. (CVE:AMRQ): When Will It Breakeven?
We feel now is a pretty good time to analyse Amaroq Minerals Ltd.'s (CVE:AMRQ) business as it appears the company may be on the cusp of a considerable accomplishment. Amaroq Minerals Ltd. engages in the acquisition, exploration, and development of mineral properties in Greenland. The CA$398m market-cap company announced a latest loss of CA$834k on 31 December 2023 for its most recent financial year result. The most pressing concern for investors is Amaroq Minerals' path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.
See our latest analysis for Amaroq Minerals
According to the 2 industry analysts covering Amaroq Minerals, the consensus is that breakeven is near. They expect the company to post a final loss in 2024, before turning a profit of CA$16m in 2025. Therefore, the company is expected to breakeven just over a year from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 73%, 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.
Given this is a high-level overview, we won’t go into details of Amaroq Minerals' upcoming projects, though, take into account that typically 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. So, 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 issue worth mentioning. Amaroq Minerals currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Amaroq Minerals' case is 56%. Note that a higher debt obligation increases the risk in investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on Amaroq Minerals, so if you are interested in understanding the company at a deeper level, take a look at Amaroq Minerals' company page on Simply Wall St. We've also compiled a list of essential factors you should look at:
Historical Track Record: What has Amaroq Minerals' 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 Amaroq Minerals' 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.
