We feel now is a pretty good time to analyse Hecla Mining Company's (NYSE:HL) business as it appears the company may be on the cusp of a considerable accomplishment. Hecla Mining Company, together with its subsidiaries, discovers, acquires, develops, and produces precious and base metal properties in the United States and internationally. The US$3.2b market-cap company announced a latest loss of US$17m on 31 December 2020 for its most recent financial year result. The most pressing concern for investors is Hecla Mining'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.
Consensus from 5 of the American Metals and Mining analysts is that Hecla Mining is on the verge of breakeven. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$122m in 2021. Therefore, the company is expected to breakeven roughly 12 months from now or less. We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 62% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Underlying developments driving Hecla Mining's growth isn’t the focus of this broad overview, but, keep in mind that by and large metals and mining companies, depending on the stage of operation and metals mined, have irregular periods of cash flow. 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 30% 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.
There are too many aspects of Hecla Mining to cover in one brief article, but the key fundamentals for the company can all be found in one place – Hecla Mining's company page on Simply Wall St. We've also compiled a list of important factors you should further research:
- Valuation: What is Hecla 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 Hecla Mining is currently mispriced by the market.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Hecla Mining’s board and the CEO’s background.
- 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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