Yahoo Finance

We feel now is a pretty good time to analyse Ionic Rare Earths Limited's (ASX:IXR) business as it appears the company may be on the cusp of a considerable accomplishment. Ionic Rare Earths Limited operates as a mineral exploration company. The company’s loss has recently broadened since it announced a AU$8.5m loss in the full financial year, compared to the latest trailing-twelve-month loss of AU$19m, moving it further away from breakeven. The most pressing concern for investors is Ionic Rare Earths' 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.

Check out our latest analysis for Ionic Rare Earths

Ionic Rare Earths is bordering on breakeven, according to the 3 Australian Metals and Mining analysts. They anticipate the company to incur a final loss in 2025, before generating positive profits of AU$21m in 2026. So, the company is predicted to breakeven approximately 2 years from now. 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 64% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Ionic Rare Earths' growth isn’t the focus of this broad overview, however, bear in mind that typically 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. Ionic Rare Earths currently has no debt on its balance sheet, which is rare for a loss-making 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 too many aspects of Ionic Rare Earths to cover in one brief article, but the key fundamentals for the company can all be found in one place – Ionic Rare Earths' company page on Simply Wall St. We've also put together a list of key aspects you should further research:

1. Valuation: What is Ionic Rare Earths 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 Ionic Rare Earths is currently mispriced by the market.

2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Ionic Rare Earths’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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.