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Yahoo
07-05-2025
- Business
- Yahoo
When Will Boab Metals Limited (ASX:BML) Become Profitable?
Boab Metals Limited (ASX:BML) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Boab Metals Limited engages in the exploration and development of mineral tenements in Australia. The AU$39m market-cap company's loss lessened since it announced a AU$3.3m loss in the full financial year, compared to the latest trailing-twelve-month loss of AU$3.1m, as it approaches breakeven. Many investors are wondering about the rate at which Boab 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. Boab Metals is bordering on breakeven, according to some Australian Metals and Mining analysts. They anticipate the company to incur a final loss in 2026, before generating positive profits of AU$129m in 2027. So, the company is predicted to breakeven approximately 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 57%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected. ASX:BML Earnings Per Share Growth May 7th 2025 We're not going to go through company-specific developments for Boab Metals given that this is a high-level summary, however, keep in mind 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. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment. See our latest analysis for Boab Metals Before we wrap up, there's one aspect worth mentioning. Boab Metals currently has no debt on its balance sheet, which is quite unusual for a cash-burning 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 Boab Metals, so if you are interested in understanding the company at a deeper level, take a look at Boab Metals' company page on Simply Wall St. We've also put together a list of important aspects you should further research: Valuation: What is Boab 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 Boab Metals 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 Boab Metals'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. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) 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.
Yahoo
27-03-2025
- Business
- Yahoo
Boab Metals (ASX:BML) Is In A Good Position To Deliver On Growth Plans
There's no doubt that money can be made by owning shares of unprofitable businesses. For example, although made losses for many years after listing, if you had bought and held the shares since 1999, you would have made a fortune. But while history lauds those rare successes, those that fail are often forgotten; who remembers So, the natural question for Boab Metals (ASX:BML) shareholders is whether they should be concerned by its rate of cash burn. For the purposes of this article, cash burn is the annual rate at which an unprofitable company spends cash to fund its growth; its negative free cash flow. The first step is to compare its cash burn with its cash reserves, to give us its 'cash runway'. A company's cash runway is calculated by dividing its cash hoard by its cash burn. As at December 2024, Boab Metals had cash of AU$3.5m and no debt. In the last year, its cash burn was AU$3.6m. So it had a cash runway of approximately 12 months from December 2024. Notably, one analyst forecasts that Boab Metals will break even (at a free cash flow level) in about 2 years. That means unless the company reduces its cash burn quickly, it may well look to raise more cash. The image below shows how its cash balance has been changing over the last few years. See our latest analysis for Boab Metals Whilst it's great to see that Boab Metals has already begun generating revenue from operations, last year it only produced AU$239k, so we don't think it is generating significant revenue, at this point. Therefore, for the purposes of this analysis we'll focus on how the cash burn is tracking. As it happens, the company's cash burn reduced by 22% over the last year, which suggests that management are mindful of the possibility of running out of cash. While the past is always worth studying, it is the future that matters most of all. So you might want to take a peek at how much the company is expected to grow in the next few years. While Boab Metals is showing a solid reduction in its cash burn, it's still worth considering how easily it could raise more cash, even just to fuel faster growth. Issuing new shares, or taking on debt, are the most common ways for a listed company to raise more money for its business. Commonly, a business will sell new shares in itself to raise cash and drive growth. We can compare a company's cash burn to its market capitalisation to get a sense for how many new shares a company would have to issue to fund one year's operations. Boab Metals' cash burn of AU$3.6m is about 10% of its AU$35m market capitalisation. As a result, we'd venture that the company could raise more cash for growth without much trouble, albeit at the cost of some dilution. Even though its cash runway makes us a little nervous, we are compelled to mention that we thought Boab Metals' cash burn relative to its market cap was relatively promising. One real positive is that at least one analyst is forecasting that the company will reach breakeven. Based on the factors mentioned in this article, we think its cash burn situation warrants some attention from shareholders, but we don't think they should be worried. Separately, we looked at different risks affecting the company and spotted 4 warning signs for Boab Metals (of which 2 shouldn't be ignored!) you should know about. If you would prefer to check out another company with better fundamentals, then do not miss this free list of interesting companies, that have HIGH return on equity and low debt or this list of stocks which are all forecast to grow. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) 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. Sign in to access your portfolio
