WA1 Resources Ltd ( ASX:WA1 )is possibly approaching a major achievement in its business, so we would like to shine some light on the company. WA1 Resources Ltd engages in the exploration and development of mineral resources in Western Australia and Northern territory. The company's loss has recently broadened since it announced a AU$4.8m loss in the full financial year, compared to the latest trailing-twelve-month loss of AU$5.7m, moving it further away from breakeven. 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.
Consensus from 2 of the Australian Metals and Mining analysts is that WA1 Resources is on the verge of breakeven. They expect the company to post a final loss in 2025, before turning a profit of AU$5.4m in 2026. Therefore, the company is expected to breakeven roughly a year 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 77% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
We're not going to go through company-specific developments for WA1 Resources given that this is a high-level summary, though, take into account that typically 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.
Check out our latest analysis for WA1 Resources
One thing we'd like to point out is that WA1 Resources has no debt on its balance sheet, which is quite unusual for a cash-burning metals and mining company, which usually has a high level of debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.
Next Steps:
There are key fundamentals of WA1 Resources which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at WA1 Resources, take a look at WA1 Resources' company page on Simply Wall St . We've also put together a list of important factors you should look at:
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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.
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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 .
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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.
