With the business potentially at an important milestone, we thought we'd take a closer look at Desert Mountain Energy Corp.'s (CVE:DME) future prospects. Desert Mountain Energy Corp. engages in the exploration and development of oil and gas, and mineral properties in the Southwestern United States. With the latest financial year loss of CA$12m and a trailing-twelve-month loss of CA$9.6m, the CA$28m market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which Desert Mountain Energy 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.

View our latest analysis for Desert Mountain Energy

According to some industry analysts covering Desert Mountain Energy, breakeven is near. They expect the company to post a final loss in 2024, before turning a profit of CA$3.9m in 2025. The company is therefore projected to breakeven just over a year from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 158% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for Desert Mountain Energy given that this is a high-level summary, though, keep in mind that typically metals and mining companies, depending on the stage of operation and metals mined, have irregular periods of cash flow. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

One thing we’d like to point out is that Desert Mountain Energy has no debt on its balance sheet, which is quite unusual for a cash-burning metals and mining company, which typically has high 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:

This article is not intended to be a comprehensive analysis on Desert Mountain Energy, so if you are interested in understanding the company at a deeper level, take a look at Desert Mountain Energy's company page on Simply Wall St. We've also compiled a list of important aspects you should further research:

1. Historical Track Record: What has Desert Mountain Energy'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 Desert Mountain Energy'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.