We feel now is a pretty good time to analyse ioneer Ltd's (ASX:INR) business as it appears the company may be on the cusp of a considerable accomplishment. ioneer Ltd explores for and develops mineral properties in North America. On 30 June 2022, the AU$955m market-cap company posted a loss of AU$13m for its most recent financial year. The most pressing concern for investors is ioneer's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for ioneer

Consensus from 2 of the Australian Metals and Mining analysts is that ioneer is on the verge of breakeven. They expect the company to post a final loss in 2024, before turning a profit of AU$48m in 2025. So, the company is predicted to breakeven approximately 2 years from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 67% is expected, 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.

We're not going to go through company-specific developments for ioneer given that this is a high-level summary, 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 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 ioneer has no debt on its balance sheet, which is quite unusual for a cash-burning metals and mining company, which typically has high debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

There are key fundamentals of ioneer 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 ioneer, take a look at ioneer's company page on Simply Wall St. We've also compiled a list of relevant aspects you should further examine:

1. Historical Track Record: What has ioneer's 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 ioneer'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.

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

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.

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