When Can We Expect A Profit From Endomines AB (publ) (STO:ENDO)?

With the business potentially at an important milestone, we thought we'd take a closer look at Endomines AB (publ)'s (STO:ENDO) future prospects. Endomines AB (publ), a mining and exploration company, primarily explores for, develops, and mines gold deposits in Finland and the United States. With the latest financial year loss of kr77m and a trailing-twelve-month loss of kr144m, the kr394m market-cap company amplified its loss by moving further away from its breakeven target. Many investors are wondering about the rate at which Endomines will turn a profit, with the big question being “when will the company 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 Endomines

According to the 2 industry analysts covering Endomines, the consensus is that breakeven is near. They expect the company to post a final loss in 2021, before turning a profit of kr4.6m in 2022. So, the company is predicted to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 81% year-on-year, on average, 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 Endomines' upcoming projects, though, take into account that typically metals and mining companies, depending on the stage of operation and metals mined, have irregular periods of cash flow. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 23% 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 Endomines 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 Endomines, take a look at Endomines' company page on Simply Wall St. We've also compiled a list of important factors you should look at:

1. Historical Track Record: What has Endomines' 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 Endomines' 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. 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.
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