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Caravel Minerals Limited (ASX:CVV) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Caravel Minerals Limited, together with its subsidiaries, explores for mineral tenements. The AU$88m market-cap company announced a latest loss of AU$6.4m on 30 June 2024 for its most recent financial year result. As path to profitability is the topic on Caravel Minerals' 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.
View our latest analysis for Caravel Minerals
Caravel Minerals is bordering on breakeven, according to some Australian Metals and Mining analysts. They expect the company to post a final loss in 2026, before turning a profit of AU$263m in 2027. The company is therefore projected to breakeven around 3 years from today. 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 96% year-on-year, on average, which signals high confidence from analysts. 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 Caravel Minerals given that this is a high-level summary, but, take into account that generally metals and mining companies, depending on the stage of operation and metals mined, have irregular periods of cash flow. 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. Caravel Minerals currently 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. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.
Next Steps:
There are key fundamentals of Caravel Minerals which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Caravel Minerals, take a look at Caravel Minerals' company page on Simply Wall St. We've also put together a list of pertinent aspects you should further research:
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Historical Track Record: What has Caravel Minerals' 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.
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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 Caravel Minerals' 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.