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Uranium Royalty Corp. (CVE:URC) Could Be Less Than A Year Away From Profitability

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We feel now is a pretty good time to analyse Uranium Royalty Corp.'s (CVE:URC) business as it appears the company may be on the cusp of a considerable accomplishment. Uranium Royalty Corp. operates as a pure-play uranium royalty company. The CA$331m market-cap company announced a latest loss of CA$1.4m on 30 April 2021 for its most recent financial year result. The most pressing concern for investors is Uranium Royalty's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for Uranium Royalty

Consensus from 2 of the Canadian Oil and Gas analysts is that Uranium Royalty is on the verge of breakeven. They expect the company to post a final loss in 2021, before turning a profit of CA$18m in 2022. Therefore, the company is expected to breakeven roughly a year from now or less! How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 20% year-on-year, on average, which is relatively reasonable. However, if this rate turns out to be too buoyant, the company may become profitable later than analysts predict.

earnings-per-share-growth
earnings-per-share-growth

Underlying developments driving Uranium Royalty's growth isn’t the focus of this broad overview, however, bear in mind that typically energy companies, depending on the stage of operation and resource produced, have irregular periods of cash flow. So, a double-digit 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 0.05% 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 too many aspects of Uranium Royalty to cover in one brief article, but the key fundamentals for the company can all be found in one place – Uranium Royalty's company page on Simply Wall St. We've also put together a list of relevant factors you should further examine:

  1. Historical Track Record: What has Uranium Royalty'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.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Uranium Royalty's board and the CEO’s background.

  3. 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.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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