Uranium Energy Corp’s (NYSEMKT:UEC): Uranium Energy Corp. operates as a uranium mining and exploration company. The US$274.28m market-cap posted a loss in its most recent financial year of -US$17.97m and a latest trailing-twelve-month loss of -US$18.64m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is UEC’s path to profitability – when will it breakeven? In this article, I will touch on the expectations for UEC’s growth and when analysts expect the company to become profitable.
Expectation from Oil and Gas analysts is UEC is on the verge of breakeven. They anticipate the company to incur a final loss in -1, before generating positive profits of US$0 in . So, UEC is predicted to breakeven approximately a couple of months from now! What rate will UEC have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 20.12%, which is rather optimistic! If this rate turns out to be too aggressive, UEC may become profitable much later than analysts predict.
Underlying developments driving UEC’s growth isn’t the focus of this broad overview, but, take into account that generally an oil and gas business has lumpy cash flows which are contingent on the natural resource and stage at which the company is operating. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing I’d like to point out is that UEC has managed its capital judiciously, with debt making up 30.39% of equity. This means that UEC has predominantly funded its operations from equity capital,and its low debt obligation reduces the risk around investing in the loss-making company.
This article is not intended to be a comprehensive analysis on UEC, so if you are interested in understanding the company at a deeper level, take a look at UEC’s company page on Simply Wall St. I’ve also compiled a list of essential aspects you should look at:
Historical Track Record: What has UEC’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 Uranium Energy’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.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.