Orla Mining Ltd.'s (TSE:OLA) Shift From Loss To Profit

Orla Mining Ltd. (TSE:OLA) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Orla Mining Ltd. acquires, explores for, and develops mineral properties. The CA$1.1b market-cap company’s loss lessened since it announced a US$28m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$27m, as it approaches breakeven. Many investors are wondering about the rate at which Orla Mining will turn a profit, with the big question being “when will the company 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 Orla Mining

Orla Mining is bordering on breakeven, according to the 3 Canadian Metals and Mining analysts. They expect the company to post a final loss in 2021, before turning a profit of US$92m in 2022. The company is therefore projected to breakeven just over a year from today. 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 98% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Orla Mining's growth isn’t the focus of this broad overview, but, take into account that typically metals and mining companies, depending on the stage of operation and metals mined, 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.

One thing we would like to bring into light with Orla Mining is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Orla Mining's case is 73%. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of Orla Mining to cover in one brief article, but the key fundamentals for the company can all be found in one place – Orla Mining's company page on Simply Wall St. We've also compiled a list of important factors you should look at:

1. Historical Track Record: What has Orla Mining'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 Orla Mining'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.
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