Meridian Mining Plc's (TSE:MNO) Shift From Loss To Profit
With the business potentially at an important milestone, we thought we'd take a closer look at Meridian Mining Plc's (TSE:MNO) future prospects. Meridian Mining Plc, together with its subsidiaries, engages in the acquisition, exploration, and development of mineral properties in Brazil. With the latest financial year loss of US$17m and a trailing-twelve-month loss of US$20m, the CA$743m market-cap company amplified its loss by moving further away from its breakeven target. Many investors are wondering about the rate at which Meridian Mining will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.
According to the 6 industry analysts covering Meridian Mining, the consensus is that breakeven is near. They expect the company to post a final loss in 2027, before turning a profit of US$60m in 2028. So, the company is predicted to breakeven approximately 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2028? Working backwards from analyst estimates, it turns out that they expect the company to grow 63% year-on-year, on average, which is extremely buoyant. 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 Meridian Mining's upcoming projects, though, take into account that typically a metal and mining business has lumpy cash flows which are contingent on the natural resource mined and stage at which the company is operating. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
Check out our latest analysis for Meridian Mining
One thing we’d like to point out is that Meridian Mining 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:
This article is not intended to be a comprehensive analysis on Meridian Mining, so if you are interested in understanding the company at a deeper level, take a look at Meridian Mining's company page on Simply Wall St. We've also put together a list of relevant aspects you should further research:
- Valuation: What is Meridian 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 Meridian 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 Meridian 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. 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.