Yahoo Finance Analysts Expect Breakeven For Lithium Americas Corp (TSE:LAC)
Lithium Americas Corp’s (TSX:LAC): Lithium Americas Corp. operates as a resource company in the United States. The CA$624.36M market-cap posted a loss in its most recent financial year of -US$33.25M and a latest trailing-twelve-month loss of -US$32.86M shrinking the gap between loss and breakeven. As path to profitability is the topic on LAC’s investors mind, I’ve decided to gauge market sentiment. Below I will provide a high-level summary of the industry analysts’ expectations for LAC.
View our latest analysis for Lithium Americas
According to the industry analysts covering LAC, breakeven is near. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$19.00M in 2021. So, LAC is predicted to breakeven approximately 3 years from now. How fast will LAC have to grow each year in order to reach the breakeven point by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 22.64% year-on-year, on average, 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 LAC’s growth isn’t the focus of this broad overview, but, keep in mind that by and large 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, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
Before I wrap up, there’s one aspect worth mentioning. LAC has managed its capital judiciously, with debt making up 0.87% of equity. This means that LAC 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 key fundamentals of LAC which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at LAC, take a look at LAC’s company page on Simply Wall St. I’ve also compiled a list of relevant aspects you should further examine:
Historical Track Record: What has LAC’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 Lithium Americas’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.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
