Stock Analysis

Americas Gold and Silver Corporation's (TSE:USA) Shift From Loss To Profit

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We feel now is a pretty good time to analyse Americas Gold and Silver Corporation's (TSE:USA) business as it appears the company may be on the cusp of a considerable accomplishment. Americas Gold and Silver Corporation, together with its subsidiaries, engages in the acquisition, exploration, development, and operation of mineral properties in North America. On 31 December 2022, the CA$111m market-cap company posted a loss of US$43m for its most recent financial year. Many investors are wondering about the rate at which Americas Gold and Silver will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

View our latest analysis for Americas Gold and Silver

According to the 5 industry analysts covering Americas Gold and Silver, the consensus is that breakeven is near. They expect the company to post a final loss in 2023, before turning a profit of US$9.0m in 2024. Therefore, the company is expected to breakeven just over a year from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 109%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

TSX:USA Earnings Per Share Growth March 18th 2023

Given this is a high-level overview, we won’t go into details of Americas Gold and Silver's upcoming projects, but, keep in mind 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’d like to point out is that The company has managed its capital prudently, with debt making up 13% 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 Americas Gold and Silver 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 Americas Gold and Silver, take a look at Americas Gold and Silver's company page on Simply Wall St. We've also compiled a list of key factors you should further research:

  1. Valuation: What is Americas Gold and Silver 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 Americas Gold and Silver 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 Americas Gold and Silver’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.

Valuation is complex, but we're helping make it simple.

Find out whether Americas Gold and Silver is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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