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Analysts Expect Breakeven For Foran Mining Corporation (CVE:FOM) Before Long

With the business potentially at an important milestone, we thought we'd take a closer look at Foran Mining Corporation's (CVE:FOM) future prospects. Foran Mining Corporation engages in the acquisition, exploration, and development of mineral properties. The CA$600m market-cap company posted a loss in its most recent financial year of CA$4.4m and a latest trailing-twelve-month loss of CA$5.8m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is Foran 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.

Check out our latest analysis for Foran Mining

Consensus from 4 of the Canadian Metals and Mining analysts is that Foran Mining is on the verge of breakeven. They anticipate the company to incur a final loss in 2023, before generating positive profits of CA$13m in 2024. Therefore, the company is expected to breakeven roughly 2 years from now. 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 87% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
earnings-per-share-growth

Given this is a high-level overview, we won’t go into details of Foran Mining's upcoming projects, however, keep in mind 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 that a high growth rate is not unusual, especially if the company is currently in an investment period.

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Before we wrap up, there’s one aspect worth mentioning. Foran Mining currently 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. 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:

This article is not intended to be a comprehensive analysis on Foran Mining, so if you are interested in understanding the company at a deeper level, take a look at Foran Mining's company page on Simply Wall St. We've also compiled a list of essential factors you should further examine:

  1. Valuation: What is Foran 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 Foran Mining 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 Foran Mining’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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