With the business potentially at an important milestone, we thought we'd take a closer look at Adriatic Metals PLC's (ASX:ADT) future prospects. Adriatic Metals PLC, through its subsidiaries, engages in the exploration and development of precious and base metals. The AU$1.2b market-cap company announced a latest loss of US$29m on 31 December 2023 for its most recent financial year result. Many investors are wondering about the rate at which Adriatic Metals will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for Adriatic Metals

Consensus from 5 of the Australian Metals and Mining analysts is that Adriatic Metals is on the verge of breakeven. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$9.9m in 2024. Therefore, the company is expected to breakeven roughly 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 82%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Adriatic Metals' growth isn’t the focus of this broad overview, however, bear in mind that typically 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 would like to bring into light with Adriatic Metals is its debt-to-equity ratio of 127%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

There are too many aspects of Adriatic Metals to cover in one brief article, but the key fundamentals for the company can all be found in one place – Adriatic Metals' company page on Simply Wall St. We've also compiled a list of relevant aspects you should further examine:

1. Valuation: What is Adriatic Metals 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 Adriatic Metals 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 Adriatic Metals’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.

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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.