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Osisko Gold Royalties Ltd (TSE:OR) Is About To Turn The Corner

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·3 min read
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Osisko Gold Royalties Ltd (TSE:OR) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Osisko Gold Royalties Ltd acquires and manages precious metal and other royalties, streams, and similar interests in Canada and internationally. With the latest financial year loss of CA$234m and a trailing-twelve-month loss of CA$201m, the CA$2.5b market-cap company alleviated its loss by moving closer towards its target of breakeven. The most pressing concern for investors is Osisko Gold Royalties' path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for Osisko Gold Royalties

Osisko Gold Royalties is bordering on breakeven, according to the 8 Canadian Metals and Mining analysts. They anticipate the company to incur a final loss in 2019, before generating positive profits of CA$29m in 2020. The company is therefore projected to breakeven around 12 months 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 40%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
earnings-per-share-growth

Underlying developments driving Osisko Gold Royalties' growth isn’t the focus of this broad overview, but, take into account 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’d like to point out is that The company has managed its capital judiciously, with debt making up 26% 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 too many aspects of Osisko Gold Royalties to cover in one brief article, but the key fundamentals for the company can all be found in one place – Osisko Gold Royalties' company page on Simply Wall St. We've also compiled a list of important aspects you should further examine:

  1. Valuation: What is Osisko Gold Royalties 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 Osisko Gold Royalties is currently mispriced by the market.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Osisko Gold Royalties’s board and the CEO’s background.

  3. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.