Syrah Resources Limited (ASX:SYR) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Syrah Resources Limited, together with its subsidiaries, engages in the exploration, evaluation, and development of mineral properties in Australia, China, Europe, India, the Americas, and internationally. The company’s loss has recently broadened since it announced a US$85m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$114m, moving it further away from breakeven. The most pressing concern for investors is Syrah 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.

See our latest analysis for Syrah Resources

According to the 4 industry analysts covering Syrah Resources, the consensus is that breakeven is near. They expect the company to post a final loss in 2025, before turning a profit of US$26m in 2026. Therefore, the company is expected to breakeven roughly 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 70%, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Syrah Resources' growth isn’t the focus of this broad overview, however, bear in mind that typically 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.

One thing we would like to bring into light with Syrah Resources is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Syrah Resources' case is 48%. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

There are too many aspects of Syrah Resources to cover in one brief article, but the key fundamentals for the company can all be found in one place – Syrah Resources' company page on Simply Wall St. We've also compiled a list of key factors you should look at:

1. Historical Track Record: What has Syrah 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 Syrah 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.