We Might See A Profit From Paladin Energy Ltd (ASX:PDN) Soon
We feel now is a pretty good time to analyse Paladin Energy Ltd's (ASX:PDN) business as it appears the company may be on the cusp of a considerable accomplishment. Paladin Energy Ltd develops, explores for, owns, and operates uranium mines in Australia, Canada, and Africa. The AU$2.8b market-cap company announced a latest loss of US$11m on 30 June 2023 for its most recent financial year result. The most pressing concern for investors is Paladin Energy's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
View our latest analysis for Paladin Energy
Consensus from 7 of the Australian Oil and Gas analysts is that Paladin Energy is on the verge of breakeven. They expect the company to post a final loss in 2023, before turning a profit of US$48m in 2024. The company is therefore projected to breakeven around a year from now or less! At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 38%, which is extremely buoyant. 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 Paladin Energy's upcoming projects, though, keep in mind that generally energy companies, depending on the stage of operation and resource produced, have irregular periods of cash flow. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 27% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
Next Steps:
There are key fundamentals of Paladin Energy 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 Paladin Energy, take a look at Paladin Energy's company page on Simply Wall St. We've also compiled a list of relevant factors you should further examine:
Valuation: What is Paladin Energy 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 Paladin Energy 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 Paladin Energy’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.
