I feel that now is a very good time to analyze Eagle Mountain Mining Limited (ASX:EM2) It looks like the company is on track to achieve some pretty good results. Eagle Mountain Mining Limited, together with its subsidiaries, is engaged in the exploration of mineral resources in Australia and the United States. As of June 30, 2023, the company, which had a market capitalization of A$19 million, had posted a loss of A$14 million in its most recent financial year. The most pressing concern for investors is Eagle Mountain Mining’s path to profitability, or when it will break even. This article looks at the company’s growth expectations and when analysts expect it to become profitable.
Check out our latest analysis for Eagle Mountain Mining.
Some industry analysts covering Eagle Mountain Mining say breakeven is close. They expect the company to post a final loss in 2025, but turn a profit of A$36 million in 2026. Therefore, the company is expected to break even about two years from now. We calculated the rate at which the company would have to grow year over year to achieve this breakeven point. We found that the average annual growth rate is expected to be 49%. This is quite optimistic. If your business is growing slowly, you’ll start seeing profits later than expected.
Since this is a high-level overview, we will not discuss company-specific developments for Eagle Mountain Mining, but consider that metals and mining businesses generally have significant cash flows that are dependent on the natural environment. . The extracted resources and the stage in which the company is operating. This means that strong growth rates going forward are not out of the ordinary, as the company is starting to reap the benefits of previous investments.
One thing we’d like to make clear about Eagle Mountain Mining is that its debt-to-equity ratio is over 2x. A general rule of thumb is that debt should not exceed 40% of equity, and in this case the company has significantly exceeded it. Higher levels of debt require tighter capital controls and increase the risk of investing in loss-making companies.
This article is not intended to be a comprehensive analysis of Eagle Mountain Mining, so if you are interested in understanding the company on a deeper level, please visit the Eagle Mountain Mining company page located at Simply Wall St. please. List of important factors that need further investigation:
- evaluation: What is Eagle Mountain Mining worth today? Is its future growth potential already factored into the price? The intrinsic value infographic in our free research report shows how much Eagle Mountain Mining is currently worth on the market. It helps you visualize if you are being mispriced.
- management team: Having an experienced management team at the helm increases our confidence in the business. View the biographies of Eagle Mountain Mining’s board members and CEO.
- Other strong performing stocks: Are there other stocks with a proven track record that offer a better outlook? See 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 using only unbiased methodologies, and articles are not intended to be financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.