Lithium Americas (Argentina) Corp. (TSE:LAAC) About To Shift From Loss To Profit

With the business potentially at an important milestone, we thought we'd take a closer look at Lithium Americas (Argentina) Corp.'s (TSE:LAAC) future prospects. Lithium Americas (Argentina) Corp. operates as a resource company. The CA$1.3b market-cap company’s loss lessened since it announced a US$94m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$13m, as it approaches breakeven. As path to profitability is the topic on Lithium Americas (Argentina)'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.

See our latest analysis for Lithium Americas (Argentina)

Consensus from 6 of the Canadian Metals and Mining analysts is that Lithium Americas (Argentina) is on the verge of breakeven. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$65m in 2024. So, the company is predicted to breakeven approximately a year from now or less! We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 1.5% is expected, which is fair. Should the business grow at a faster rate, it will become profitable at an earlier date than expected.

Underlying developments driving Lithium Americas (Argentina)'s growth isn’t the focus of this broad overview, though, bear in mind that typically metals and mining companies, depending on the stage of operation and metals mined, have irregular periods of cash flow. This means that a low or volatile growth rate in the near future is not unusual, especially if the company is currently in an investment period.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 16% 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 Lithium Americas (Argentina) 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 Lithium Americas (Argentina), take a look at Lithium Americas (Argentina)'s company page on Simply Wall St. We've also compiled a list of important factors you should further research:

1. Historical Track Record: What has Lithium Americas (Argentina)'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 Lithium Americas (Argentina)'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.