Venturex Resources Limited's (ASX:VXR): Venturex Resources Limited, together with its subsidiaries, engages in the exploration and development of mineral resources in Australia. On 30 June 2019, the AU$31m market-cap posted a loss of -AU$2.7m for its most recent financial year. The most pressing concern for investors is VXR’s path to profitability – when will it breakeven? I’ve put together a brief outline of industry analyst expectations for VXR, its year of breakeven and its implied growth rate.

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VXR is bordering on breakeven, according to Metals and Mining analysts. They expect the company to post a final loss in 2020, before turning a profit of AU$12m in 2021. So, VXR is predicted to breakeven approximately a couple of months from now! How fast will VXR have to grow each year in order to reach the breakeven point by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 51% 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.

Underlying developments driving VXR’s growth isn’t the focus of this broad overview, but, take into account that typically 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 I’d like to point out is that VXR has managed its capital judiciously, with debt making up 0.2% of equity. This means that VXR 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 VXR which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at VXR, take a look at VXR’s company page on Simply Wall St. I’ve also compiled a list of pertinent aspects you should further examine:

1. Valuation: What is VXR 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 VXR 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 Venturex Resources’s board and the CEO’s back ground.

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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

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