Piedmont Lithium Inc. (ASX:PLL) Is About To Turn The Corner

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$13m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$14m, moving it further away from breakeven. The most pressing concern for investors is Piedmont Lithium's 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.

Check out our latest analysis for Piedmont Lithium

Consensus from 5 of the Australian Metals and Mining analysts is that Piedmont Lithium is on the verge of breakeven. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$78m in 2023. The company is therefore projected to breakeven around 12 months from now or less. We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 65% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won’t go into details of Piedmont Lithium's upcoming projects, 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. The company has managed its capital prudently, with debt making up 0.1% 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 factors you should look at:

1. Historical Track Record: What has Piedmont Lithium'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 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.

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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.