St Barbara Limited (ASX:SBM) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. St Barbara Limited, together with its subsidiaries, engages in the exploration, development, mining, and sale of gold. The AU$299m market-cap company announced a latest loss of AU$54m on 30 June 2024 for its most recent financial year result. As path to profitability is the topic on St Barbara's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for St Barbara

St Barbara is bordering on breakeven, according to the 3 Australian Metals and Mining analysts. They anticipate the company to incur a final loss in 2024, before generating positive profits of AU$8.8m in 2025. The company is therefore projected to breakeven around 12 months from now or less. At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 75%, which is rather optimistic! 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 St Barbara's upcoming projects, however, keep in mind that typically 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. 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 The company has managed its capital prudently, with debt making up 0.3% 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 St Barbara, so if you are interested in understanding the company at a deeper level, take a look at St Barbara's company page on Simply Wall St. We've also put together a list of relevant aspects you should look at:

1. Historical Track Record: What has St Barbara'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 St Barbara'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.

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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.