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With the business potentially at an important milestone, we thought we'd take a closer look at enCore Energy Corp.'s (CVE:EU) future prospects. enCore Energy Corp. engages in the acquisition, exploration, and development of uranium resource properties in the United States. The company’s loss has recently broadened since it announced a US$22m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$46m, moving it further away from breakeven. The most pressing concern for investors is enCore Energy's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
See our latest analysis for enCore Energy
Consensus from 4 of the Canadian Oil and Gas analysts is that enCore Energy is on the verge of breakeven. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$9.5m in 2025. Therefore, the company is expected to breakeven roughly 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 68% year-on-year, on average, 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 enCore Energy's upcoming projects, however, take into account that typically energy companies, depending on the stage of operation and resource produced, 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.
One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 5.6% 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 enCore Energy, so if you are interested in understanding the company at a deeper level, take a look at enCore Energy's company page on Simply Wall St. We've also put together a list of key factors you should further examine:
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Valuation: What is enCore Energy 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 enCore Energy 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 enCore Energy’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.