Bardoc Gold Limited's (ASX:BDC): Bardoc Gold Limited engages in the identification, exploration, and development of mineral properties in Australia. The AU$120m market-cap company announced a latest loss of -AU$38.8m on 30 June 2019 for its most recent financial year result. Many investors are wondering the rate at which BDC will turn a profit, with the big question being “when will the company breakeven?” In this article, I will touch on the expectations for BDC’s growth and when analysts expect the company to become profitable.
According to the industry analysts covering BDC, breakeven is near. They expect the company to post a final loss in 2021, before turning a profit of AU$81m in 2022. So, BDC is predicted to breakeven approximately 2 years from now. In order to meet this breakeven date, I calculated the rate at which BDC must grow year-on-year. It turns out an average annual growth rate of 30% is expected, which is rather optimistic! If this rate turns out to be too aggressive, BDC may become profitable much later than analysts predict.
Given this is a high-level overview, I won’t go into details of BDC’s upcoming projects, though, bear 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, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
Before I wrap up, there’s one issue worth mentioning. BDC currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. Oftentimes, losses exist only on paper but other times, it can be a red flag.
There are key fundamentals of BDC which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at BDC, take a look at BDC’s company page on Simply Wall St. I’ve also compiled a list of pertinent aspects you should further research:
- Historical Track Record: What has BDC's 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 Bardoc Gold’s board and the CEO’s back ground.
- 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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.