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Analysts Expect Taseko Mines Limited (TSE:TKO) To Breakeven Soon

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Simply Wall St
·3 min read
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We feel now is a pretty good time to analyse Taseko Mines Limited's (TSE:TKO) business as it appears the company may be on the cusp of a considerable accomplishment. Taseko Mines Limited, a mining company, acquires, develops, and operates mineral properties. The CA$703m market-cap company announced a latest loss of CA$24m on 31 December 2020 for its most recent financial year result. Many investors are wondering about the rate at which Taseko Mines 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 Taseko Mines

According to the 3 industry analysts covering Taseko Mines, the consensus is that breakeven is near. They expect the company to post a final loss in 2020, before turning a profit of CA$7.5m in 2021. Therefore, the company is expected to breakeven roughly a year from now or less! We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 65% 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 Taseko Mines given that this is a high-level summary, though, keep in mind that typically metals and mining companies, depending on the stage of operation and metals mined, have irregular periods of cash flow. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

One thing we would like to bring into light with Taseko Mines is its debt-to-equity ratio of 105%. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. 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 Taseko Mines, so if you are interested in understanding the company at a deeper level, take a look at Taseko Mines' company page on Simply Wall St. We've also compiled a list of important factors you should look at:

  1. Valuation: What is Taseko Mines worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Taseko Mines is currently mispriced by the market.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Taseko Mines’s 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.

This article by Simply Wall St is general in nature. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.