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With the business potentially at an important milestone, we thought we'd take a closer look at SunMirror AG's (ETR:ROR) future prospects. SunMirror AG explores for and develops mineral properties in Switzerland. On 30 June 2022, the €24m market-cap company posted a loss of US$18m for its most recent financial year. The most pressing concern for investors is SunMirror's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
See our latest analysis for SunMirror
Consensus from 2 of the German Metals and Mining analysts is that SunMirror is on the verge of breakeven. They expect the company to post a final loss in 2024, before turning a profit of US$1.3m in 2025. Therefore, the company is expected to breakeven roughly 3 years from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 77%, which is extremely buoyant. 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 SunMirror's upcoming projects, but, take into account 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.
One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 20% 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 key fundamentals of SunMirror 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 SunMirror, take a look at SunMirror's company page on Simply Wall St. We've also put together a list of pertinent factors you should further research:
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Valuation: What is SunMirror 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 SunMirror 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 SunMirror’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.