In This Article:
With the business potentially at an important milestone, we thought we'd take a closer look at Phoenix Copper Limited's (LON:PXC) future prospects. Phoenix Copper Limited, together with its subsidiaries, engages in the exploration and mining activities for precious and base metals primarily in North America. The UK£29m market-cap company announced a latest loss of US$1.5m on 31 December 2023 for its most recent financial year result. As path to profitability is the topic on Phoenix Copper's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
View our latest analysis for Phoenix Copper
Expectations from some of the British Metals and Mining analysts is that Phoenix Copper is on the verge of breakeven. They expect the company to post a final loss in 2024, before turning a profit of US$19m 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 134% 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.
Given this is a high-level overview, we won’t go into details of Phoenix Copper's upcoming projects, however, bear in mind that by and large 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. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 6.0% 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 Phoenix Copper, so if you are interested in understanding the company at a deeper level, take a look at Phoenix Copper's company page on Simply Wall St. We've also compiled a list of essential factors you should further research:
-
Historical Track Record: What has Phoenix Copper'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.
-
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Phoenix Copper's board and the CEO’s background.
-
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.