Yahoo Finance We Might See A Profit From Hudbay Minerals Inc. (TSE:HBM) Soon
With the business potentially at an important milestone, we thought we'd take a closer look at Hudbay Minerals Inc.'s (TSE:HBM) future prospects. Hudbay Minerals Inc., a diversified mining company, together with its subsidiaries, focuses on the discovery, production, and marketing of base and precious metals in North and South America. The CA$1.4b market-cap company posted a loss in its most recent financial year of US$244m and a latest trailing-twelve-month loss of US$120m shrinking the gap between loss and breakeven. As path to profitability is the topic on Hudbay Minerals' investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.
Check out our latest analysis for Hudbay Minerals
According to the 11 industry analysts covering Hudbay Minerals, the consensus is that breakeven is near. They expect the company to post a final loss in 2021, before turning a profit of US$219m in 2022. The company is therefore projected to breakeven around 12 months from now or less. We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 7.6% is expected, which is relatively conservative. Should the business grow at a faster rate, it will become profitable at an earlier date than expected.
Given this is a high-level overview, we won’t go into details of Hudbay Minerals' upcoming projects, but, bear in mind that typically metals and mining companies, depending on the stage of operation and metals mined, have irregular periods of cash flow. So, periods of lower growth in the upcoming years is not out of the ordinary, particularly when a company is in a period of investment.
One thing we would like to bring into light with Hudbay Minerals is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Hudbay Minerals' case is 76%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on Hudbay Minerals, so if you are interested in understanding the company at a deeper level, take a look at Hudbay Minerals' company page on Simply Wall St. We've also compiled a list of pertinent aspects you should further research:
Valuation: What is Hudbay 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 Hudbay Minerals 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 Hudbay Minerals’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.
