Metro Mining Limited (ASX:MMI) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Metro Mining Limited, together with its subsidiaries, operates as an exploration and mining company in China. The company’s loss has recently broadened since it announced a AU$13m loss in the full financial year, compared to the latest trailing-twelve-month loss of AU$34m, moving it further away from breakeven. As path to profitability is the topic on Metro Mining's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for Metro Mining

Metro Mining is bordering on breakeven, according to the 2 Australian Metals and Mining analysts. They anticipate the company to incur a final loss in 2023, before generating positive profits of AU$17m in 2024. So, the company is predicted to breakeven approximately 12 months from now or less. At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 31%, 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 Metro Mining given that this is a high-level summary, but, take into account that generally 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.

Before we wrap up, there’s one issue worth mentioning. Metro Mining currently has a debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. 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 Metro Mining, so if you are interested in understanding the company at a deeper level, take a look at Metro Mining's company page on Simply Wall St. We've also compiled a list of pertinent aspects you should further examine:

1. Valuation: What is Metro Mining 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 Metro Mining 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 Metro Mining’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.