Piedmont Lithium Inc. (ASX:PLL): Are Analysts Optimistic?

Piedmont Lithium Inc. (ASX:PLL) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Piedmont Lithium Inc., a development stage company, engages in the exploration and development of resource projects in the United States. The company’s loss has recently broadened since it announced a US$22m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$39m, moving it further away from breakeven. As path to profitability is the topic on Piedmont Lithium's investors mind, we've decided to gauge market sentiment. 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 Piedmont Lithium

Piedmont Lithium is bordering on breakeven, according to the 8 Australian Metals and Mining analysts. They expect the company to post a final loss in 2024, before turning a profit of US$1.2m in 2025. The company is therefore projected to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 107% year-on-year, on average, 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 Piedmont Lithium's growth isn’t the focus of this broad overview, though, keep 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 The company has managed its capital judiciously, with debt making up 1.4% 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 Piedmont Lithium to cover in one brief article, but the key fundamentals for the company can all be found in one place – Piedmont Lithium's company page on Simply Wall St. We've also compiled a list of pertinent aspects you should look at:

1. Valuation: What is Piedmont Lithium 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 Piedmont Lithium 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 Piedmont Lithium’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.