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With the business potentially at an important milestone, we thought we'd take a closer look at Rock Tech Lithium Inc.'s (CVE:RCK) future prospects. Rock Tech Lithium Inc. engages in the exploration and development of lithium properties. The CA$127m market-cap company’s loss lessened since it announced a CA$29m loss in the full financial year, compared to the latest trailing-twelve-month loss of CA$22m, as it approaches breakeven. Many investors are wondering about the rate at which Rock Tech Lithium 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 Rock Tech Lithium
Rock Tech Lithium is bordering on breakeven, according to the 2 Canadian Metals and Mining analysts. They expect the company to post a final loss in 2025, before turning a profit of CA$121m in 2026. Therefore, the company is expected to breakeven roughly 2 years 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 101% 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 Rock Tech Lithium's growth isn’t the focus of this broad overview, though, keep in mind that generally metals and mining companies, depending on the stage of operation and metals mined, have irregular periods of cash flow. 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. Rock Tech Lithium 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 key fundamentals of Rock Tech Lithium which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Rock Tech Lithium, take a look at Rock Tech Lithium's company page on Simply Wall St. We've also put together a list of important factors you should further examine:
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Historical Track Record: What has Rock Tech Lithium'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.
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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 Rock Tech Lithium'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.