Medallion Metals Limited (ASX:MM8) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Medallion Metals Limited engages in mineral exploration activities in Australia. The AU$66m market-cap company announced a latest loss of AU$2.9m on 30 June 2024 for its most recent financial year result. The most pressing concern for investors is Medallion Metals' path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

See our latest analysis for Medallion Metals

Expectations from some of the Australian Metals and Mining analysts is that Medallion Metals is on the verge of breakeven. They anticipate the company to incur a final loss in 2026, before generating positive profits of AU$58m in 2027. Therefore, the company is expected to breakeven roughly 2 years from today. 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 68% is expected, which is extremely buoyant. 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 Medallion Metals given that this is a high-level summary, but, take into account that typically a metal and mining business has lumpy cash flows which are contingent on the natural resource mined and stage at which the company is operating. 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 aspect worth mentioning. The company has managed its capital judiciously, with debt making up 24% 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:

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

1. Valuation: What is Medallion 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 Medallion 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 Medallion 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.

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.