enCore Energy Corp. (CVE:EU) Is About To Turn The Corner

enCore Energy Corp. (CVE:EU) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. enCore Energy Corp. engages in the acquisition, exploration, and development of uranium resource properties in the United States. The CA$938m market-cap company posted a loss in its most recent financial year of US$17m and a latest trailing-twelve-month loss of US$11m shrinking the gap between loss and breakeven. The most pressing concern for investors is enCore Energy'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 enCore Energy

According to the 3 industry analysts covering enCore Energy, the consensus is that breakeven is near. They expect the company to post a final loss in 2023, before turning a profit of US$21m in 2024. Therefore, the company is expected to breakeven roughly 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 83%, 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 enCore Energy's upcoming projects, though, bear in mind that typically energy companies, depending on the stage of operation and resource produced, 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.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 15% 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:

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

1. Valuation: What is enCore Energy 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 enCore Energy 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 enCore Energy’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.