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With the business potentially at an important milestone, we thought we'd take a closer look at Critical Elements Lithium Corporation's (CVE:CRE) future prospects. Critical Elements Lithium Corporation engages in the acquisition, exploration, and development of mining properties in Canada. With the latest financial year loss of CA$6.4m and a trailing-twelve-month loss of CA$3.9m, the CA$166m market-cap company alleviated its loss by moving closer towards its target of breakeven. The most pressing concern for investors is Critical Elements Lithium'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.
Check out our latest analysis for Critical Elements Lithium
Consensus from 2 of the Canadian Metals and Mining analysts is that Critical Elements Lithium is on the verge of breakeven. They expect the company to post a final loss in 2025, before turning a profit of CA$4.3m in 2026. So, the company is predicted to breakeven approximately 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 95% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Underlying developments driving Critical Elements Lithium's growth isn’t the focus of this broad overview, but, bear in mind that typically 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 Critical Elements Lithium has no debt on its balance sheet, which is rare for a loss-making metals and mining company, which usually has a high level of debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
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There are key fundamentals of Critical Elements 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 Critical Elements Lithium, take a look at Critical Elements Lithium's company page on Simply Wall St. We've also put together a list of essential aspects you should look at: