We Might See A Profit From Denison Mines Corp. (TSE:DML) Soon

With the business potentially at an important milestone, we thought we'd take a closer look at Denison Mines Corp.'s (TSE:DML) future prospects. Denison Mines Corp. operates as a uranium exploration and development company in Canada. The company’s loss has recently broadened since it announced a CA$16m loss in the full financial year, compared to the latest trailing-twelve-month loss of CA$20m, moving it further away from breakeven. Many investors are wondering about the rate at which Denison Mines will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

See our latest analysis for Denison Mines

According to the 4 industry analysts covering Denison Mines, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2020, before generating positive profits of CA$14m in 2021. 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 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 21% 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.

We're not going to go through company-specific developments for Denison Mines given that this is a high-level summary, though, take into account that generally energy companies, depending on the stage of operation and resource produced, 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 judiciously, with debt making up 0.02% 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 Denison Mines to cover in one brief article, but the key fundamentals for the company can all be found in one place – Denison Mines' company page on Simply Wall St. We've also compiled a list of key factors you should further research:

1. Historical Track Record: What has Denison Mines' 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 Denison Mines' 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.

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.

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