Loss-Making Boab Metals Limited (ASX:BML) Expected To Breakeven In The Medium-Term

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$34m 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. The most pressing concern for investors is Boab Metals' path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for Boab Metals

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$116m in 2027. The company is therefore projected to breakeven around 2 years from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 57%, which signals high confidence from analysts. 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, bear 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 Boab Metals has no debt on its balance sheet, which is rare for a loss-making metals and mining company, which typically has high 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.