Yahoo Finance Market Sentiment Around Loss-Making Sabina Gold & Silver Corp (TSE:SBB)
Sabina Gold & Silver Corp’s (TSE:SBB): Sabina Gold & Silver Corp., a precious metals company, engages in the acquisition, exploration, and development of mineral resource properties in Canada. With the latest financial year loss of -CA$4m and a trailing-twelve month of -CA$5m, the CA$356m market-cap amplifies its loss by moving further away from its breakeven target. Many investors are wondering the rate at which SBB will turn a profit, with the big question being “when will the company breakeven?” In this article, I will touch on the expectations for SBB’s growth and when analysts expect the company to become profitable.
View our latest analysis for Sabina Gold & Silver
According to the industry analysts covering SBB, breakeven is near. They expect the company to post a final loss in 2021, before turning a profit of CA$92m in 2022. So, SBB is predicted to breakeven approximately a few months from now. In order to meet this breakeven date, I calculated the rate at which SBB must grow year-on-year. It turns out an average annual growth rate of 67% is expected, which is rather optimistic! If this rate turns out to be too aggressive, SBB may become profitable much later than analysts predict.
Given this is a high-level overview, I won’t go into details of SBB’s upcoming projects, but, take into account that generally 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.
Before I wrap up, there’s one aspect worth mentioning. SBB has managed its capital prudently, with debt making up 0.04% of equity. This means that SBB 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:
This article is not intended to be a comprehensive analysis on SBB, so if you are interested in understanding the company at a deeper level, take a look at SBB’s company page on Simply Wall St. I’ve also compiled a list of key aspects you should further research:
Valuation: What is SBB 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 SBB 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 Sabina Gold & Silver’s board and the CEO’s back ground.
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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
