Breakeven On The Horizon For Atlas Lithium Corporation (NASDAQ:ATLX)

We feel now is a pretty good time to analyse Atlas Lithium Corporation's (NASDAQ:ATLX) business as it appears the company may be on the cusp of a considerable accomplishment. Atlas Lithium Corporation operates as a mineral exploration and development company in Brazil. On 31 December 2023, the US$283m market-cap company posted a loss of US$41m for its most recent financial year. As path to profitability is the topic on Atlas Lithium's investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

View our latest analysis for Atlas Lithium

Atlas Lithium is bordering on breakeven, according to the 3 American Metals and Mining analysts. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$61m 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 99% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth

Underlying developments driving Atlas Lithium's growth isn’t the focus of this broad overview, however, keep in mind that generally metals and mining companies, depending on the stage of operation and metals mined, have irregular periods of cash flow. 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. Atlas Lithium currently has a debt-to-equity ratio of 105%. Typically, debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

There are key fundamentals of Atlas Lithium 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 Atlas Lithium, take a look at Atlas Lithium's company page on Simply Wall St. We've also put together a list of key aspects you should further examine:

1. Valuation: What is Atlas Lithium 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 Atlas Lithium 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 Atlas Lithium’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.

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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.