When Will Hycroft Mining Holding Corporation (NASDAQ:HYMC) Turn A Profit?
With the business potentially at an important milestone, we thought we'd take a closer look at Hycroft Mining Holding Corporation's (NASDAQ:HYMC) future prospects. Hycroft Mining Holding Corporation operates as a gold and silver producer in the United States. The US$443m market-cap company posted a loss in its most recent financial year of US$99m and a latest trailing-twelve-month loss of US$135m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is Hycroft Mining Holding's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
See our latest analysis for Hycroft Mining Holding
According to the 2 industry analysts covering Hycroft Mining Holding, the consensus is that breakeven is near. They expect the company to post a final loss in 2021, before turning a profit of US$188m in 2022. So, the company is predicted to breakeven just over a year 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 signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Given this is a high-level overview, we won’t go into details of Hycroft Mining Holding's upcoming projects, but, keep 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 that a high growth rate is not unusual, especially if the company is currently in an investment period.
One thing we would like to bring into light with Hycroft Mining Holding is it 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. These losses tend to occur only on paper, however, in other cases it can be forewarning.
Next Steps:
There are key fundamentals of Hycroft Mining Holding 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 Hycroft Mining Holding, take a look at Hycroft Mining Holding's company page on Simply Wall St. We've also put together a list of essential factors you should further research:
Historical Track Record: What has Hycroft Mining Holding'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 Hycroft Mining Holding'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.
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. 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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