When Can We Expect A Profit From Americas Gold and Silver Corporation (TSE:USA)?

With the business potentially at an important milestone, we thought we'd take a closer look at Americas Gold and Silver Corporation's (TSE:USA) future prospects. Americas Gold and Silver Corporation, together with its subsidiaries, engages in the exploration, development, and production of mineral properties in the Americas. The CA$1.0b market-cap company posted a loss in its most recent financial year of US$45m and a latest trailing-twelve-month loss of US$60m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is Americas Gold and Silver'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.

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According to the 2 industry analysts covering Americas Gold and Silver, the consensus is that breakeven is near. They expect the company to post a final loss in 2025, before turning a profit of US$55m in 2026. 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 158%, 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 Americas Gold and Silver's growth isn’t the focus of this broad overview, however, bear in mind that by and large metals and mining companies, depending on the stage of operation and metals mined, have irregular periods of cash flow. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

See our latest analysis for Americas Gold and Silver

Before we wrap up, there’s one issue worth mentioning. Americas Gold and Silver currently has a debt-to-equity ratio of 107%. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Americas Gold and Silver, so if you are interested in understanding the company at a deeper level, 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.

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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.