Osisko Development Corp.'s (CVE:ODV) Path To Profitability

Osisko Development Corp. (CVE:ODV) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Osisko Development Corp., a gold development company, engages in the acquisition, exploration, and development of precious metals resource properties in North America. The company’s loss has recently broadened since it announced a CA$192m loss in the full financial year, compared to the latest trailing-twelve-month loss of CA$205m, moving it further away from breakeven. The most pressing concern for investors is Osisko Development'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.

View our latest analysis for Osisko Development

According to the 2 industry analysts covering Osisko Development, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2023, before generating positive profits of CA$44m in 2024. So, the company is predicted to breakeven just over a year from now. 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 116%, 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.

Underlying developments driving Osisko Development's growth isn’t the focus of this broad overview, but, take into account that generally a metal and mining business has lumpy cash flows which are contingent on the natural resource mined and stage at which the company is operating. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 2.7% 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 Osisko Development 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 Osisko Development, take a look at Osisko Development's company page on Simply Wall St. We've also compiled a list of important aspects you should further research:

1. Valuation: What is Osisko Development 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 Osisko Development 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 Osisko Development’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.