Fission Uranium Corp.'s (TSE:FCU) Path To Profitability

We feel now is a pretty good time to analyse Fission Uranium Corp.'s (TSE:FCU) business as it appears the company may be on the cusp of a considerable accomplishment. Fission Uranium Corp. engages in the acquisition, exploration, and development of uranium resource properties in Canada. The CA$921m market-cap company posted a loss in its most recent financial year of CA$8.8m and a latest trailing-twelve-month loss of CA$5.5m shrinking the gap between loss and breakeven. As path to profitability is the topic on Fission Uranium'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.

View our latest analysis for Fission Uranium

Consensus from 4 of the Canadian Oil and Gas analysts is that Fission Uranium is on the verge of breakeven. They anticipate the company to incur a final loss in 2025, before generating positive profits of CA$4.3m in 2026. So, the company is predicted to breakeven approximately 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 50% year-on-year, on average, which is extremely buoyant. 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 Fission Uranium's upcoming projects, however, bear 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.

Before we wrap up, there’s one aspect worth mentioning. Fission Uranium currently has no debt on its balance sheet, which is quite unusual for a cash-burning oil and gas 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 Fission Uranium, so if you are interested in understanding the company at a deeper level, take a look at Fission Uranium's company page on Simply Wall St. We've also compiled a list of important aspects you should further research:

1. Historical Track Record: What has Fission Uranium'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 Fission Uranium'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.