When Will Cadoux Limited (ASX:CCM) Become Profitable?

With the business potentially at an important milestone, we thought we'd take a closer look at Cadoux Limited's (ASX:CCM) future prospects. Cadoux Limited engages in the exploration, evaluation, and development of mineral properties in Australia and the Southeast Asia. With the latest financial year loss of AU$4.2m and a trailing-twelve-month loss of AU$2.6m, the AU$21m market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which Cadoux 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.

Check out our latest analysis for Cadoux

Expectations from some of the Australian Metals and Mining analysts is that Cadoux is on the verge of breakeven. They anticipate the company to incur a final loss in 2025, before generating positive profits of AU$16m in 2026. Therefore, the company is expected to breakeven roughly 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 90% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for Cadoux given that this is a high-level summary, however, keep in mind that typically metals and mining companies, depending on the stage of operation and metals mined, have irregular periods of cash flow. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

One thing we’d like to point out is that Cadoux has no debt on its balance sheet, which is rare for a loss-making 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:

This article is not intended to be a comprehensive analysis on Cadoux, so if you are interested in understanding the company at a deeper level, take a look at Cadoux's company page on Simply Wall St. We've also compiled a list of key factors you should further examine:

1. Historical Track Record: What has Cadoux's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Cadoux'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.

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

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