In This Article:
Atlantic Lithium Limited (LON:ALL) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Atlantic Lithium Limited explores for and develops mineral properties in West Africa. The UK£264m market-cap company posted a loss in its most recent financial year of AU$4.9m and a latest trailing-twelve-month loss of AU$17m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is Atlantic Lithium's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
See our latest analysis for Atlantic Lithium
According to the 2 industry analysts covering Atlantic Lithium, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2023, before generating positive profits of AU$19m in 2024. Therefore, the company is expected to breakeven roughly 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 101% 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.
Given this is a high-level overview, we won’t go into details of Atlantic Lithium's upcoming projects, however, keep in mind that generally metals and mining companies, depending on the stage of operation and metals mined, have irregular periods of cash flow. 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 Atlantic 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.
Next Steps:
There are too many aspects of Atlantic Lithium to cover in one brief article, but the key fundamentals for the company can all be found in one place – Atlantic Lithium's company page on Simply Wall St. We've also put together a list of essential factors you should further research:
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Valuation: What is Atlantic Lithium 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 Atlantic Lithium 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 Atlantic Lithium’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.