Analysts Expect Breakeven For Boab Metals Limited (ASX:BML) Before Long

Boab Metals Limited (ASX:BML) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Boab Metals Limited engages in the exploration and development of mineral tenements in Australia. The AU$61m market-cap company posted a loss in its most recent financial year of AU$3.3m and a latest trailing-twelve-month loss of AU$3.1m shrinking the gap between loss and breakeven. Many investors are wondering about the rate at which Boab Metals will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

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Boab Metals is bordering on breakeven, according to some Australian Metals and Mining analysts. They anticipate the company to incur a final loss in 2026, before generating positive profits of AU$21m in 2027. Therefore, the company is expected to breakeven roughly 2 years from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 75% is expected, which is rather optimistic! 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 Boab Metals given that this is a high-level summary, but, take into account that by and large 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. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

See our latest analysis for Boab Metals

Before we wrap up, there’s one aspect worth mentioning. Boab Metals currently 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 Boab 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 Boab Metals, take a look at Boab Metals' company page on Simply Wall St. We've also put together a list of essential aspects you should look at:

1. Valuation: What is Boab 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 Boab 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 Boab 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.