Piedmont Lithium Inc. (ASX:PLL) Has Found A Path To Profitability
With the business potentially at an important milestone, we thought we'd take a closer look at Piedmont Lithium Inc.'s (ASX:PLL) future prospects. Piedmont Lithium Inc., an exploration stage company, engages in the exploration and development of resource projects in the United States. With the latest financial year loss of US$43m and a trailing-twelve-month loss of US$20m, the AU$1.5b market-cap company alleviated its loss by moving closer towards its target of breakeven. The most pressing concern for investors is Piedmont Lithium's 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 Piedmont Lithium
According to the 6 industry analysts covering Piedmont Lithium, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$63m in 2023. The company is therefore projected to breakeven around a year from now or less! How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 70% 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.
Underlying developments driving Piedmont Lithium's growth isn’t the focus of this broad overview, however, bear in mind that by and large metals and mining companies, depending on the stage of operation and metals mined, have irregular periods of cash flow. 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 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.
There are key fundamentals of Piedmont Lithium 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 Piedmont Lithium, take a look at Piedmont Lithium's company page on Simply Wall St. We've also put together a list of relevant aspects you should look at:
Historical Track Record: What has Piedmont Lithium's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Piedmont Lithium'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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