Matador Mining Limited (ASX:MZZ) Is Expected To Breakeven In The Near Future

We feel now is a pretty good time to analyse Matador Mining Limited's (ASX:MZZ) business as it appears the company may be on the cusp of a considerable accomplishment. Matador Mining Limited engages in the mining and mineral exploration activities. The company’s loss has recently broadened since it announced a AU$2.5m loss in the full financial year, compared to the latest trailing-twelve-month loss of AU$2.5m, moving it further away from breakeven. The most pressing concern for investors is Matador Mining's 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 Matador Mining

Consensus from 2 of the Australian Metals and Mining analysts is that Matador Mining is on the verge of breakeven. They anticipate the company to incur a final loss in 2022, before generating positive profits of AU$44m in 2023. So, the company is predicted to breakeven approximately 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 60% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Matador Mining's growth isn’t the focus of this broad overview, however, keep 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.

Before we wrap up, there’s one aspect worth mentioning. Matador Mining currently 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 Matador Mining, so if you are interested in understanding the company at a deeper level, take a look at Matador Mining's company page on Simply Wall St. We've also compiled a list of key aspects you should further research:

1. Valuation: What is Matador Mining 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 Matador Mining 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 Matador Mining’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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