When Will Peninsula Energy Limited (ASX:PEN) Turn A Profit?
Peninsula Energy Limited (ASX:PEN) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Peninsula Energy Limited, together with its subsidiaries, operates as a uranium exploration company in the United States. On 30 June 2023, the AU$151m market-cap company posted a loss of US$3.5m for its most recent financial year. As path to profitability is the topic on Peninsula Energy's investors mind, we've decided to gauge market sentiment. 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 Peninsula Energy
Peninsula Energy is bordering on breakeven, according to the 3 Australian Oil and Gas analysts. They expect the company to post a final loss in 2025, before turning a profit of US$35m in 2026. So, the company is predicted to breakeven approximately 3 years from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 52% is expected, which is rather optimistic! 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 Peninsula Energy's upcoming projects, however, keep in mind that by and large an energy 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.
Before we wrap up, there’s one aspect worth mentioning. Peninsula Energy currently has no debt on its balance sheet, which is rare for a loss-making oil and gas company, which usually has a high level of debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
Next Steps:
There are too many aspects of Peninsula Energy to cover in one brief article, but the key fundamentals for the company can all be found in one place – Peninsula Energy's company page on Simply Wall St. We've also put together a list of relevant factors you should further research:
Valuation: What is Peninsula 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 Peninsula 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 Peninsula 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.
