Analysts Expect Bushveld Minerals Limited (LON:BMN) To Breakeven Soon

Bushveld Minerals Limited (LON:BMN) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Bushveld Minerals Limited operates as an integrated primary vanadium producer for the steel, energy, chemicals and aerospace industries in South Africa, Europe, Asia, the United States, and internationally. The UK£16m market-cap company announced a latest loss of US$104m on 31 December 2023 for its most recent financial year result. As path to profitability is the topic on Bushveld Minerals' 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.

See our latest analysis for Bushveld Minerals

Consensus from 2 of the British Metals and Mining analysts is that Bushveld Minerals is on the verge of breakeven. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$11m in 2024. So, the company is predicted to breakeven approximately 12 months 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 79%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of Bushveld Minerals' upcoming projects, but, 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, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

One thing we would like to bring into light with Bushveld Minerals is its debt-to-equity ratio of over 2x. 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 around investing in the loss-making company.

Next Steps:

There are key fundamentals of Bushveld Minerals 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 Bushveld Minerals, take a look at Bushveld Minerals' company page on Simply Wall St. We've also compiled a list of relevant factors you should look at:

1. Valuation: What is Bushveld Minerals 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 Bushveld Minerals 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 Bushveld Minerals’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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com