Yahoo Finance When Will Phoenix Copper Limited (LON:PXC) Breakeven?
Phoenix Copper Limited (LON:PXC) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Phoenix Copper Limited engages in the exploration and mining activities for precious and base metals primarily in North America. The UK£28m market-cap company announced a latest loss of US$1.5m on 31 December 2022 for its most recent financial year result. Many investors are wondering about the rate at which Phoenix Copper 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.
View our latest analysis for Phoenix Copper
Expectations from some of the British Metals and Mining analysts is that Phoenix Copper is on the verge of breakeven. They expect the company to post a final loss in 2024, before turning a profit of US$19m in 2025. So, the company is predicted to breakeven approximately 2 years from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 70% is expected, which is extremely buoyant. 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 Phoenix Copper's upcoming projects, however, keep in mind that generally metals and mining companies, depending on the stage of operation and metals mined, have irregular periods of cash flow. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing we’d like to point out is that Phoenix Copper has no debt on its balance sheet, which is rare for a loss-making metals and mining company, which typically has high debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on Phoenix Copper, so if you are interested in understanding the company at a deeper level, take a look at Phoenix Copper's company page on Simply Wall St. We've also compiled a list of important factors you should further research:
Valuation: What is Phoenix Copper 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 Phoenix Copper 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 Phoenix Copper’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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