Analysts Are Optimistic We'll See A Profit From Bellevue Gold Limited (ASX:BGL)

Bellevue Gold Limited (ASX:BGL) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Bellevue Gold Limited, together with its subsidiaries, engages in the exploration and evaluation of gold properties in Australia. The AU$2.4b market-cap company posted a loss in its most recent financial year of AU$25m and a latest trailing-twelve-month loss of AU$10m shrinking the gap between loss and breakeven. Many investors are wondering about the rate at which Bellevue Gold 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 Bellevue Gold

Consensus from 6 of the Australian Metals and Mining analysts is that Bellevue Gold is on the verge of breakeven. They anticipate the company to incur a final loss in 2023, before generating positive profits of AU$78m in 2024. So, the company is predicted to breakeven approximately a year from now or less! We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 34% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for Bellevue Gold given that this is a high-level summary, however, keep in mind that typically a metal and mining business has lumpy cash flows which are contingent on the natural resource mined and stage at which the company is operating. 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 issue worth mentioning. Bellevue Gold currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Bellevue Gold's case is 50%. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

There are too many aspects of Bellevue Gold to cover in one brief article, but the key fundamentals for the company can all be found in one place – Bellevue Gold's company page on Simply Wall St. We've also compiled a list of essential aspects you should further examine:

1. Valuation: What is Bellevue Gold 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 Bellevue Gold 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 Bellevue Gold’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.