Condor Energies Inc. (TSE:CDR) About To Shift From Loss To Profit

With the business potentially at an important milestone, we thought we'd take a closer look at Condor Energies Inc.'s (TSE:CDR) future prospects. Condor Energies Inc., an oil and gas company, engages in the production of natural gas in Uzbekistan, Turkey, and Kazakhstan. With the latest financial year loss of CA$11m and a trailing-twelve-month loss of CA$9.8m, the CA$100m market-cap company alleviated its loss by moving closer towards its target of breakeven. As path to profitability is the topic on Condor Energies' investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for Condor Energies

According to some industry analysts covering Condor Energies, breakeven is near. They anticipate the company to incur a final loss in 2023, before generating positive profits of CA$9.4m in 2024. The company is therefore projected to breakeven around 12 months from now or less. At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 135%, 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.

Given this is a high-level overview, we won’t go into details of Condor Energies' upcoming projects, but, keep in mind that generally an energy business has lumpy cash flows which are contingent on the natural resource and stage at which the company is operating. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we would like to bring into light with Condor Energies is it currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. Oftentimes, losses exist only on paper but other times, it can be a red flag.

Next Steps:

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

1. Valuation: What is Condor Energies 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 Condor Energies 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 Condor Energies’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.