With the business potentially at an important milestone, we thought we'd take a closer look at Pilbara Minerals Limited's (ASX:PLS) future prospects. Pilbara Minerals Limited explores for, develops, and operates mineral resources in Australia. On 30 June 2021, the AU$7.7b market-cap company posted a loss of AU$51m for its most recent financial year. As path to profitability is the topic on Pilbara Minerals' 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.

Check out our latest analysis for Pilbara Minerals

According to the 6 industry analysts covering Pilbara Minerals, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2021, before generating positive profits of AU$354m in 2022. Therefore, the company is expected to breakeven roughly a year from now or less! We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 44% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Pilbara Minerals' growth isn’t the focus of this broad overview, though, bear 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 that a high growth rate is not unusual, especially if the company is currently in an investment period.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 25% 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:

There are too many aspects of Pilbara Minerals to cover in one brief article, but the key fundamentals for the company can all be found in one place – Pilbara Minerals' company page on Simply Wall St. We've also put together a list of important factors you should further research:

1. Valuation: What is Pilbara Minerals 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 Pilbara Minerals 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 Pilbara Minerals’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.

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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.