When Will Boab Metals Limited (ASX:BML) Become Profitable?

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 explores for mineral tenements in Australia and Latin America. The AU$65m market-cap company posted a loss in its most recent financial year of AU$3.1m and a latest trailing-twelve-month loss of AU$3.6m leading to an even wider 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.

See our latest analysis for Boab Metals

Expectations from some of the Australian Metals and Mining analysts is that Boab Metals is on the verge of breakeven. They expect the company to post a final loss in 2023, before turning a profit of AU$37m in 2024. So, the company is predicted to breakeven approximately 3 years from today. 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 70% is expected, 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.

Underlying developments driving Boab Metals' growth isn’t the focus of this broad overview, though, bear in mind that generally metals and mining companies, depending on the stage of operation and metals mined, have irregular periods of cash flow. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

One thing we’d like to point out is that Boab 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. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

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

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. 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.
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