Queensland Pacific Metals Limited (ASX:QPM) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Queensland Pacific Metals Limited, together with its subsidiaries, focuses on the generation and sale of electricity from waste mine gas in Australia. On 30 June 2024, the AU$88m market-cap company posted a loss of AU$24m for its most recent financial year. The most pressing concern for investors is Queensland Pacific Metals' 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 Queensland Pacific Metals

Queensland Pacific Metals is bordering on breakeven, according to some Australian Metals and Mining analysts. They anticipate the company to incur a final loss in 2024, before generating positive profits of AU$33m in 2025. The company is therefore projected to breakeven around 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 113% year-on-year, on average, which is rather optimistic! 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 Queensland Pacific Metals' upcoming projects, but, bear in mind 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 that a high growth rate is not unusual, especially if the company is currently in an investment period.

One thing we would like to bring into light with Queensland Pacific Metals is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Queensland Pacific Metals' case is 58%. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Queensland Pacific Metals, so if you are interested in understanding the company at a deeper level, take a look at Queensland Pacific Metals' company page on Simply Wall St. We've also compiled a list of key factors you should further research:

1. Valuation: What is Queensland Pacific 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 Queensland Pacific Metals is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Queensland Pacific Metals’s 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.