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Analysts Expect Breakeven For Horizonte Minerals Plc (LON:HZM) Before Long

Horizonte Minerals Plc (LON:HZM) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Horizonte Minerals Plc, together with its subsidiaries, engages in the exploration and development of mineral projects in Brazil. The UK£4.0m market-cap company posted a loss in its most recent financial year of US$5.3m and a latest trailing-twelve-month loss of US$7.2m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is Horizonte Minerals' path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for Horizonte Minerals

According to the 3 industry analysts covering Horizonte Minerals, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$25m in 2025. So, the company is predicted to breakeven just over a year 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 65% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

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

We're not going to go through company-specific developments for Horizonte Minerals given that this is a high-level summary, but, 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. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

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Before we wrap up, there’s one issue worth mentioning. Horizonte Minerals currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Horizonte Minerals' case is 93%. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

There are too many aspects of Horizonte Minerals to cover in one brief article, but the key fundamentals for the company can all be found in one place – Horizonte Minerals' company page on Simply Wall St. We've also compiled a list of key factors you should further research:

  1. Historical Track Record: What has Horizonte 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.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Horizonte Minerals' 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.