We feel now is a pretty good time to analyse WA1 Resources Ltd's (ASX:WA1) business as it appears the company may be on the cusp of a considerable accomplishment. WA1 Resources Ltd engages in the exploration and development of mineral resources in Western Australia and Northern territory. The AU$930m market-cap company announced a latest loss of AU$3.5m on 30 June 2024 for its most recent financial year result. Many investors are wondering about the rate at which WA1 Resources will turn a profit, with the big question being “when will the company 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 WA1 Resources

According to the 2 industry analysts covering WA1 Resources, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2024, before generating positive profits of AU$800k in 2025. So, the company is predicted to breakeven approximately 12 months from now or less. We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 67% is expected, 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 WA1 Resources' growth isn’t the focus of this broad overview, though, take into account that by and large 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. 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. WA1 Resources currently has no debt on its balance sheet, which is rare for a loss-making metals and mining company, which typically has high 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:

This article is not intended to be a comprehensive analysis on WA1 Resources, so if you are interested in understanding the company at a deeper level, take a look at WA1 Resources' company page on Simply Wall St. We've also put together a list of pertinent aspects you should further research:

1. Historical Track Record: What has WA1 Resources' performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.

2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on WA1 Resources' 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.