When Will Skeena Resources Limited (TSE:SKE) Turn A Profit?
We feel now is a pretty good time to analyse Skeena Resources Limited's (TSE:SKE) business as it appears the company may be on the cusp of a considerable accomplishment. Skeena Resources Limited explores for and develops mineral properties in Canada. The CA$574m market-cap company posted a loss in its most recent financial year of CA$89m and a latest trailing-twelve-month loss of CA$92m leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which Skeena Resources will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
Check out our latest analysis for Skeena Resources
According to the 5 industry analysts covering Skeena Resources, the consensus is that breakeven is near. They expect the company to post a final loss in 2025, before turning a profit of CA$207m in 2026. The company is therefore projected to breakeven around 2 years from today. 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 73%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
We're not going to go through company-specific developments for Skeena Resources given that this is a high-level summary, however, take into account that generally a metal and mining business has lumpy cash flows which are contingent on the natural resource mined and stage at which the company is operating. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
Before we wrap up, there’s one aspect worth mentioning. Skeena Resources currently has no debt on its balance sheet, which is rare for a loss-making metals and mining 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 Skeena Resources to cover in one brief article, but the key fundamentals for the company can all be found in one place – Skeena Resources' company page on Simply Wall St. We've also compiled a list of relevant aspects you should look at:
Valuation: What is Skeena Resources 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 Skeena Resources 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 Skeena Resources’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.
