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Ascot Resources Ltd. (TSE:AOT) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Ascot Resources Ltd. engages in the exploration, evaluation, and development of mineral properties in the United States and Canada. With the latest financial year loss of CA$10m and a trailing-twelve-month loss of CA$3.0m, the CA$117m market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which Ascot Resources will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
See our latest analysis for Ascot Resources
According to the 3 industry analysts covering Ascot Resources, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2024, before generating positive profits of CA$149m in 2025. Therefore, the company is expected to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 47% 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.
Given this is a high-level overview, we won’t go into details of Ascot Resources' upcoming projects, but, bear in mind that by and large a metal and mining business has lumpy cash flows which are contingent on the natural resource mined and stage at which the company is operating. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.
One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 12% 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 Ascot Resources to cover in one brief article, but the key fundamentals for the company can all be found in one place – Ascot Resources' company page on Simply Wall St. We've also compiled a list of key aspects you should further research:
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Valuation: What is Ascot Resources 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 Ascot Resources is currently mispriced by the market.
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Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Ascot Resources’s board and the CEO’s background.
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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.