When Will enCore Energy Corp. (CVE:EU) Turn A Profit?

We feel now is a pretty good time to analyse enCore Energy Corp.'s (CVE:EU) business as it appears the company may be on the cusp of a considerable accomplishment. enCore Energy Corp. engages in the acquisition, exploration, and development of uranium resource properties in the United States. The CA$1.1b market-cap company posted a loss in its most recent financial year of US$22m and a latest trailing-twelve-month loss of US$21m shrinking the gap between loss and breakeven. As path to profitability is the topic on enCore Energy's 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.

Check out our latest analysis for enCore Energy

Consensus from 4 of the Canadian Oil and Gas analysts is that enCore Energy is on the verge of breakeven. They expect the company to post a final loss in 2024, before turning a profit of US$23m in 2025. Therefore, the company is expected to breakeven just over a year from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 60% is expected, 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.

Underlying developments driving enCore Energy's growth isn’t the focus of this broad overview, however, bear in mind that generally 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 5.3% 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 key fundamentals of enCore Energy which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at enCore Energy, take a look at enCore Energy's company page on Simply Wall St. We've also put together a list of pertinent factors you should further examine:

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.