Yahoo Finance Phoenix Copper Limited (LON:PXC): Is Breakeven Near?
With the business potentially at an important milestone, we thought we'd take a closer look at Phoenix Copper Limited's (LON:PXC) future prospects. Phoenix Copper Limited, together with its subsidiaries, engages in the exploration and mining activities for precious and base metals primarily in North America. The UK£31m market-cap company posted a loss in its most recent financial year of US$1.5m and a latest trailing-twelve-month loss of US$1.1m shrinking the gap between loss and breakeven. As path to profitability is the topic on Phoenix Copper's investors mind, we've decided to gauge market sentiment. 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 Phoenix Copper
Expectations from some of the British Metals and Mining analysts is that Phoenix Copper is on the verge of breakeven. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$19m in 2025. So, the company is predicted to breakeven approximately 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 80%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving Phoenix Copper's growth isn’t the focus of this broad overview, though, take into account 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.
Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 5.3% 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 Phoenix Copper 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 Phoenix Copper, take a look at Phoenix Copper's company page on Simply Wall St. We've also compiled a list of essential aspects you should look at:
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.
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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.
