Yahoo Finance Thor Explorations Ltd. (CVE:THX) On The Verge Of Breaking Even
With the business potentially at an important milestone, we thought we'd take a closer look at Thor Explorations Ltd.'s (CVE:THX) future prospects. Thor Explorations Ltd., a natural resources company, engages in the acquisition, exploration, development, and production of mineral properties in Senegal, Burkina Faso, Nigeria, and Canada. The CA$154m market-cap company posted a loss in its most recent financial year of US$2.0m and a latest trailing-twelve-month loss of US$1.7m shrinking the gap between loss and breakeven. As path to profitability is the topic on Thor Explorations' investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
Check out our latest analysis for Thor Explorations
According to the 4 industry analysts covering Thor Explorations, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$41m in 2022. Therefore, the company is expected to breakeven roughly 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 51% 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 Thor Explorations' upcoming projects, however, 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.
One thing we would like to bring into light with Thor Explorations is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Thor Explorations' case is 90%. Note that a higher debt obligation increases the risk around investing in the loss-making company.
Next Steps:
There are key fundamentals of Thor Explorations 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 Thor Explorations, take a look at Thor Explorations' company page on Simply Wall St. We've also compiled a list of relevant factors you should further research:
Valuation: What is Thor Explorations 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 Thor Explorations 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 Thor Explorations’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.
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.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here
