Analysts Expect Breakeven For Global Lithium Resources Limited (ASX:GL1) Before Long
Global Lithium Resources Limited (ASX:GL1) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Global Lithium Resources Limited operates as a lithium exploration company. The company’s loss has recently broadened since it announced a AU$1.2m loss in the full financial year, compared to the latest trailing-twelve-month loss of AU$3.1m, moving it further away from breakeven. As path to profitability is the topic on Global Lithium Resources' 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 Global Lithium Resources
According to some industry analysts covering Global Lithium Resources, breakeven is near. They expect the company to post a final loss in 2024, before turning a profit of AU$16m in 2025. The company is therefore projected to breakeven around 3 years from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 46%, which is rather optimistic! 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 Global Lithium Resources' upcoming projects, though, keep in mind that generally 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.
Before we wrap up, there’s one aspect worth mentioning. Global Lithium Resources currently has no debt on its balance sheet, which is quite unusual for a cash-burning metals and mining company, which usually has a high level of 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:
There are too many aspects of Global Lithium Resources to cover in one brief article, but the key fundamentals for the company can all be found in one place – Global Lithium Resources' company page on Simply Wall St. We've also put together a list of key factors you should further examine:
Historical Track Record: What has Global Lithium Resources' performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Global Lithium Resources' 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.
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