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Breakeven Is Near for Americas Gold and Silver Corporation (TSE:USA)

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·3 min read
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Americas Gold and Silver Corporation (TSE:USA) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Americas Gold and Silver Corporation, together with its subsidiaries, engages in the acquisition, exploration, development, and operation of mineral properties in North America. On 31 December 2021, the CA$186m market-cap company posted a loss of US$158m for its most recent financial year. Many investors are wondering about the rate at which Americas Gold and Silver 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.

Check out our latest analysis for Americas Gold and Silver

Americas Gold and Silver is bordering on breakeven, according to the 4 Canadian Metals and Mining analysts. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$3.3m in 2022. So, the company is predicted to breakeven approximately a year from now or less! At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 108%, 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 Americas Gold and Silver given that this is a high-level summary, however, take into account that typically metals and mining companies, depending on the stage of operation and metals mined, 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 19% 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.

Next Steps:

There are key fundamentals of Americas Gold and Silver 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 Americas Gold and Silver, take a look at Americas Gold and Silver's company page on Simply Wall St. We've also compiled a list of important factors you should further research:

  1. Valuation: What is Americas Gold and Silver 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 Americas Gold and Silver 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 Americas Gold and Silver’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.

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.

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