Analysts Expect Breakeven For Silver Mountain Resources Inc. (CVE:AGMR) Before Long

We feel now is a pretty good time to analyse Silver Mountain Resources Inc.'s (CVE:AGMR) business as it appears the company may be on the cusp of a considerable accomplishment. Silver Mountain Resources Inc. engages in the acquisition, exploration, and development of precious metal resource properties in Peru. The company’s loss has recently broadened since it announced a US$2.1m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$17m, moving it further away from breakeven. The most pressing concern for investors is Silver Mountain Resources' path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

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According to the 2 industry analysts covering Silver Mountain Resources, the consensus is that breakeven is near. They expect the company to post a final loss in 2025, before turning a profit of US$1.2m in 2026. 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 67% 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.

We're not going to go through company-specific developments for Silver Mountain Resources given that this is a high-level summary, however, take into account 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 high growth rate is not unusual, especially if the company is currently in an investment period.

See our latest analysis for Silver Mountain Resources

One thing we’d like to point out is that Silver Mountain Resources has no debt on its balance sheet, which is quite unusual for a cash-burning metals and mining company, which usually has a high level of debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Silver Mountain Resources, so if you are interested in understanding the company at a deeper level, take a look at Silver Mountain Resources' company page on Simply Wall St. We've also put together a list of important aspects you should further research:

1. Historical Track Record: What has Silver Mountain Resources' 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 Silver Mountain Resources' 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.