In This Article:
We feel now is a pretty good time to analyse Laramide Resources Ltd.'s (TSE:LAM) business as it appears the company may be on the cusp of a considerable accomplishment. Laramide Resources Ltd. engages in the mining, exploration, and development of uranium assets in Australia and the United States. The company’s loss has recently broadened since it announced a CA$4.7m loss in the full financial year, compared to the latest trailing-twelve-month loss of CA$5.2m, moving it further away from breakeven. Many investors are wondering about the rate at which Laramide Resources will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.
Check out our latest analysis for Laramide Resources
Consensus from 3 of the Canadian Oil and Gas analysts is that Laramide Resources is on the verge of breakeven. They anticipate the company to incur a final loss in 2026, before generating positive profits of CA$10m in 2027. 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 2027? Working backwards from analyst estimates, it turns out that they expect the company to grow 27% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
We're not going to go through company-specific developments for Laramide Resources given that this is a high-level summary, but, take into account that by and large an energy business has lumpy cash flows which are contingent on the natural resource and stage at which the company is operating. 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 4.7% 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:
This article is not intended to be a comprehensive analysis on Laramide Resources, so if you are interested in understanding the company at a deeper level, take a look at Laramide Resources' company page on Simply Wall St. We've also put together a list of pertinent aspects you should further research:
-
Historical Track Record: What has Laramide Resources' 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 Laramide Resources' 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.