Kodal Minerals PLC (LON:KOD) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Kodal Minerals PLC, together with its subsidiaries, engages in the exploration and evaluation of mineral resources in the United Kingdom and West Africa. On 31 March 2023, the UK￡103m market-cap company posted a loss of UK￡1.5m for its most recent financial year. Many investors are wondering about the rate at which Kodal Minerals will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Check out our latest analysis for Kodal Minerals

According to some industry analysts covering Kodal Minerals, breakeven is near. They expect the company to post a final loss in 2024, before turning a profit of UK￡6.0m in 2025. The company is therefore projected to breakeven around 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 46% year-on-year, on average, 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.

Given this is a high-level overview, we won’t go into details of Kodal Minerals' upcoming projects, but, keep in mind 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.

Before we wrap up, there’s one aspect worth mentioning. Kodal Minerals currently has no debt on its balance sheet, which is quite unusual for a cash-burning metals and mining company, which usually has a high level of debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Kodal 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 Kodal Minerals, take a look at Kodal Minerals' company page on Simply Wall St. We've also put together a list of important aspects you should further research:

1. Valuation: What is Kodal 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 Kodal 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 Kodal 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.