With the business potentially at an important milestone, we thought we’d take a closer look at Condor Gold Plc’s (LON:CNR) future prospects. Condor Gold Plc, together with its subsidiaries, engages in the exploration and development of gold and silver properties in Nicaragua. The company’s loss has recently broadened since it announced a UK£1.3m loss in the full financial year, compared to the latest trailing-twelve-month loss of UK£2.0m, moving it further away from breakeven. As path to profitability is the topic on Condor Gold’s investors mind, we’ve decided to gauge market sentiment. In this article, we will touch on the expectations for the company’s growth and when analysts expect it to become profitable.
Condor Gold is bordering on breakeven, according to some British Metals and Mining analysts. They anticipate the company to incur a final loss in 2022, before generating positive profits of UK£10m in 2023. Therefore, the company is expected to breakeven roughly 2 years from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 97% is expected, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Given this is a high-level overview, we won’t go into details of Condor Gold’s upcoming projects, though, take into account that by and large metals and mining companies, depending on the stage of operation and metals mined, have irregular periods of cash flow. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing we’d like to point out is that Condor Gold 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.
This article is not intended to be a comprehensive analysis on Condor Gold, so if you are interested in understanding the company at a deeper level, take a look at Condor Gold’s company page on Simply Wall St. We’ve also compiled a list of relevant factors you should further research:
Valuation: What is Condor Gold 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 Condor Gold 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 Condor Gold’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.
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.
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