New Century Resources Limited (ASX:NCZ) Is About To Turn The Corner
With the business potentially at an important milestone, we thought we'd take a closer look at New Century Resources Limited's (ASX:NCZ) future prospects. New Century Resources Limited engages in the exploration and development of mineral properties in Australia. The AU$110m market-cap company announced a latest loss of AU$28m on 30 June 2022 for its most recent financial year result. The most pressing concern for investors is New Century Resources' path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
Check out our latest analysis for New Century Resources
According to some industry analysts covering New Century Resources, breakeven is near. They expect the company to post a final loss in 2022, before turning a profit of AU$38m in 2023. Therefore, the company is expected to breakeven roughly 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 69% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
We're not going to go through company-specific developments for New Century Resources given that this is a high-level summary, 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. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 0.4% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on New Century Resources, so if you are interested in understanding the company at a deeper level, take a look at New Century Resources' company page on Simply Wall St. We've also compiled a list of essential factors you should look at:
Valuation: What is New Century Resources 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 New Century Resources 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 New Century Resources’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) simplywallst.com.
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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