Yahoo Finance Kingston Resources Limited (ASX:KSN) About To Shift From Loss To Profit
With the business potentially at an important milestone, we thought we'd take a closer look at Kingston Resources Limited's (ASX:KSN) future prospects. Kingston Resources Limited engages in the exploration and evaluation of mineral properties in Australia. With the latest financial year loss of AU$2.0m and a trailing-twelve-month loss of AU$340k, the AU$62m market-cap company alleviated its loss by moving closer towards its target of breakeven. The most pressing concern for investors is Kingston Resources' path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.
View our latest analysis for Kingston Resources
Kingston Resources is bordering on breakeven, according to some Australian Metals and Mining analysts. They anticipate the company to incur a final loss in 2021, before generating positive profits of AU$7.4m in 2022. Therefore, the company is expected to breakeven roughly a year from now or less! How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 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.
Given this is a high-level overview, we won’t go into details of Kingston Resources' upcoming projects, but, bear 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 that a high growth rate is not unusual, especially if the company is currently in an investment period.
One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 0.2% 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 Kingston Resources 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 Kingston Resources, take a look at Kingston Resources' company page on Simply Wall St. We've also compiled a list of relevant factors you should further research:
Valuation: What is Kingston Resources 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 Kingston Resources is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Kingston Resources’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.
