Analysts Expect Breakeven For Andromeda Metals Limited (ASX:ADN) Before Long

We feel now is a pretty good time to analyse Andromeda Metals Limited's (ASX:ADN) business as it appears the company may be on the cusp of a considerable accomplishment. Andromeda Metals Limited, together with its subsidiaries, operates as a mineral exploration company in Australia. The company’s loss has recently broadened since it announced a AU$9.5m loss in the full financial year, compared to the latest trailing-twelve-month loss of AU$9.6m, moving it further away from breakeven. Many investors are wondering about the rate at which Andromeda Metals will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

View our latest analysis for Andromeda Metals

According to some industry analysts covering Andromeda Metals, breakeven is near. They anticipate the company to incur a final loss in 2024, before generating positive profits of AU$19m in 2025. Therefore, the company is expected to breakeven just over a year from today. 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 120% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Andromeda Metals' growth isn’t the focus of this broad overview, but, keep in mind that generally metals and mining companies, depending on the stage of operation and metals mined, have irregular periods of cash flow. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we’d like to point out is that Andromeda Metals has no debt on its balance sheet, which is quite unusual for a cash-burning metals and mining company, which usually has a high level of 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 Andromeda Metals 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 Andromeda Metals, take a look at Andromeda Metals' company page on Simply Wall St. We've also put together a list of important aspects you should look at:

1. Valuation: What is Andromeda 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 Andromeda Metals 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 Andromeda Metals’s board and the CEO’s background.
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.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com