Analysts Are Optimistic We'll See A Profit From Ascot Resources Ltd. (TSE:AOT)

We feel now is a pretty good time to analyse Ascot Resources Ltd.'s (TSE:AOT) business as it appears the company may be on the cusp of a considerable accomplishment. Ascot Resources Ltd. operates as a mineral development and exploration company in the United States and Canada. The CA$505m market-cap company announced a latest loss of CA$10m on 31 December 2023 for its most recent financial year result. The most pressing concern for investors is Ascot Resources' 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.

See our latest analysis for Ascot Resources

Ascot Resources is bordering on breakeven, according to the 4 Canadian Metals and Mining analysts. They expect the company to post a final loss in 2023, before turning a profit of CA$2.5m in 2024. So, the company is predicted to breakeven approximately a year from now or less! How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 146% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won’t go into details of Ascot Resources' upcoming projects, but, take into account that generally 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.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 4.9% 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 too many aspects of Ascot Resources to cover in one brief article, but the key fundamentals for the company can all be found in one place – Ascot Resources' company page on Simply Wall St. We've also put together a list of key aspects you should further examine:

1. Valuation: What is Ascot Resources 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 Ascot Resources 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 Ascot Resources’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.