With the business potentially at an important milestone, we thought we'd take a closer look at Fission Uranium Corp.'s (TSE:FCU) future prospects. Fission Uranium Corp. engages in the acquisition, exploration, and development of uranium resource properties in Canada. The company’s loss has recently broadened since it announced a CA$6.8m loss in the full financial year, compared to the latest trailing-twelve-month loss of CA$8.9m, moving it further away from breakeven. Many investors are wondering about the rate at which Fission Uranium will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
Consensus from 2 of the Canadian Oil and Gas analysts is that Fission Uranium is on the verge of breakeven. They anticipate the company to incur a final loss in 2023, before generating positive profits of CA$3.0m in 2024. So, the company is predicted to breakeven approximately 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 77% 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.
Given this is a high-level overview, we won’t go into details of Fission Uranium's upcoming projects, however, keep in mind that by and large energy companies, depending on the stage of operation and resource produced, have irregular periods of cash flow. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.
Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 2.0% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
This article is not intended to be a comprehensive analysis on Fission Uranium, so if you are interested in understanding the company at a deeper level, take a look at Fission Uranium's company page on Simply Wall St. We've also compiled a list of essential aspects you should look at:
Historical Track Record: What has Fission Uranium'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 Fission Uranium's 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.