Altus Strategies plc (LON:ALS) About To Shift From Loss To Profit
We feel now is a pretty good time to analyse Altus Strategies plc's (LON:ALS) business as it appears the company may be on the cusp of a considerable accomplishment. Altus Strategies plc, together its subsidiaries, discovers, acquires, explores for, and develops mineral properties in Africa. The UK£66m market-cap company posted a loss in its most recent financial year of UK£2.1m and a latest trailing-twelve-month loss of UK£6.6m leading to an even wider gap between loss and breakeven. As path to profitability is the topic on Altus Strategies' 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.
View our latest analysis for Altus Strategies
According to some industry analysts covering Altus Strategies, breakeven is near. They anticipate the company to incur a final loss in 2021, before generating positive profits of UK£700k 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 117% 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.
Underlying developments driving Altus Strategies' growth isn’t the focus of this broad overview, however, bear in mind that by and large metals and mining companies, depending on the stage of operation and metals mined, have irregular periods of cash flow. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
One thing we’d like to point out is that Altus Strategies 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:
There are key fundamentals of Altus Strategies 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 Altus Strategies, take a look at Altus Strategies' company page on Simply Wall St. We've also put together a list of important aspects you should look at:
Valuation: What is Altus Strategies 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 Altus Strategies 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 Altus Strategies’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.
