Bushveld Minerals Limited (LON:BMN) Is About To Turn The Corner

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 company’s loss has recently broadened since it announced a US$39m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$50m, moving it further away from breakeven. Many investors are wondering about the rate at which Bushveld Minerals will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for Bushveld Minerals

According to the 2 industry analysts covering Bushveld Minerals, the consensus is that breakeven is near. They expect the company to post a final loss in 2023, before turning a profit of US$11m in 2024. Therefore, the company is expected to breakeven roughly 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 63%, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Bushveld Minerals' growth isn’t the focus of this broad overview, but, 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 would like to bring into light with Bushveld Minerals is its debt-to-equity ratio of 113%. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk in 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 put together a list of relevant aspects you should further examine:

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.