Yahoo Finance When Will Osisko Mining Inc. (TSE:OSK) Become Profitable?
Osisko Mining Inc. (TSE:OSK) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Osisko Mining Inc., a mineral exploration company, engages in the acquisition, exploration, and development of gold resource properties in Canada. With the latest financial year loss of CA$23m and a trailing-twelve-month loss of CA$8.7m, the CA$1.3b market-cap company alleviated its loss by moving closer towards its target of breakeven. The most pressing concern for investors is Osisko Mining's path to profitability – when will it breakeven? 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 Osisko Mining
Consensus from 9 of the Canadian Metals and Mining analysts is that Osisko Mining is on the verge of breakeven. They expect the company to post a final loss in 2024, before turning a profit of CA$94m in 2025. Therefore, the company is expected to breakeven roughly 2 years from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 55%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
We're not going to go through company-specific developments for Osisko Mining given that this is a high-level summary, but, bear in mind that typically 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, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 13% 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 Osisko Mining 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 Osisko Mining, take a look at Osisko Mining's company page on Simply Wall St. We've also compiled a list of relevant aspects you should look at:
Valuation: What is Osisko Mining 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 Osisko Mining 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 Osisko Mining’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.
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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