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Queensland Pacific Metals Limited (ASX:QPM) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Queensland Pacific Metals Limited focuses on the production of metals for the emerging lithium-ion battery and electric vehicle sector. With the latest financial year loss of AU$39m and a trailing-twelve-month loss of AU$51m, the AU$91m market-cap company amplified its loss by moving further away from its breakeven target. Many investors are wondering about the rate at which Queensland Pacific Metals will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.
View our latest analysis for Queensland Pacific Metals
Queensland Pacific Metals is bordering on breakeven, according to some Australian Metals and Mining analysts. They anticipate the company to incur a final loss in 2024, before generating positive profits of AU$52m in 2025. Therefore, the company is expected to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 105% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, we won’t go into details of Queensland Pacific Metals' upcoming projects, but, keep in mind that by and large 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.
One thing we would like to bring into light with Queensland Pacific Metals is its debt-to-equity ratio of 174%. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.
Next Steps:
There are too many aspects of Queensland Pacific Metals to cover in one brief article, but the key fundamentals for the company can all be found in one place – Queensland Pacific Metals' company page on Simply Wall St. We've also put together a list of pertinent factors you should look at:
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Valuation: What is Queensland Pacific Metals 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 Queensland Pacific Metals 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 Queensland Pacific Metals’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.