Analysts Expect Mincor Resources NL (ASX:MCR) To Breakeven Soon

With the business potentially at an important milestone, we thought we'd take a closer look at Mincor Resources NL's (ASX:MCR) future prospects. Mincor Resources NL, together with its subsidiaries, engages in the exploration, development, and mining of mineral resources in Australia. With the latest financial year loss of AU$13m and a trailing-twelve-month loss of AU$22m, the AU$998m market-cap company amplified its loss by moving further away from its breakeven target. The most pressing concern for investors is Mincor Resources' path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

See our latest analysis for Mincor Resources

According to the 3 industry analysts covering Mincor Resources, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2021, before generating positive profits of AU$8.0m in 2022. The company is therefore projected to breakeven around a year from now or less! How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 90% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Mincor Resources' growth isn’t the focus of this broad overview, though, take into account that typically 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 The company has managed its capital prudently, with debt making up 23% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

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

1. Valuation: What is Mincor Resources 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 Mincor Resources 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 Mincor Resources’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.