Analysts Are Optimistic We'll See A Profit From AfriTin Mining Limited (LON:ATM)

By
Simply Wall St
Published
December 28, 2021
AIM:ATM
Source: Shutterstock

AfriTin Mining Limited (LON:ATM) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. AfriTin Mining Limited, together with its subsidiaries, engages in the exploration and development of projects in Namibia and South Africa. The UK£60m market-cap company’s loss lessened since it announced a UK£5.7m loss in the full financial year, compared to the latest trailing-twelve-month loss of UK£5.4m, as it approaches breakeven. As path to profitability is the topic on AfriTin Mining's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for AfriTin Mining

AfriTin Mining is bordering on breakeven, according to the 2 British Metals and Mining analysts. They expect the company to post a final loss in 2021, before turning a profit of UK£800k in 2022. The company is therefore projected to breakeven around a year from now or less! At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 81%, 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.

earnings-per-share-growth
AIM:ATM Earnings Per Share Growth December 28th 2021

We're not going to go through company-specific developments for AfriTin Mining given that this is a high-level summary, however, bear in mind 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. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 1.9% 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 too many aspects of AfriTin Mining to cover in one brief article, but the key fundamentals for the company can all be found in one place – AfriTin Mining's company page on Simply Wall St. We've also compiled a list of essential aspects you should further examine:

  1. Valuation: What is AfriTin Mining 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 AfriTin Mining 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 AfriTin 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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