TSE:NGD): New Gold Inc., an intermediate gold mining company, engages in the development and operation of mineral properties. With the latest financial year loss of US$73.5m and a trailing-twelve month of US$88.4m, the CA$1.5b market-cap amplifies its loss by moving further away from its breakeven target. The most pressing concern for investors is NGD’s path to profitability – when will it breakeven? In this article, I will touch on the expectations for NGD’s growth and when analysts expect the company to become profitable.” data-reactid=”28″New Gold Inc.’s (TSE:NGD): New Gold Inc., an intermediate gold mining company, engages in the development and operation of mineral properties. With the latest financial year loss of US$73.5m and a trailing-twelve month of US$88.4m, the CA$1.5b market-cap amplifies its loss by moving further away from its breakeven target. The most pressing concern for investors is NGD’s path to profitability – when will it breakeven? In this article, I will touch on the expectations for NGD’s growth and when analysts expect the company to become profitable.
See our latest analysis for New Gold ” data-reactid=”29″ See our latest analysis for New Gold
Consensus from the 4 Metals and Mining analysts is NGD is on the verge of breakeven. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$114m in 2021. NGD is therefore projected to breakeven around a few months from now. How fast will NGD have to grow each year in order to reach the breakeven point by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 105% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
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Underlying developments driving NGD’s growth isn’t the focus of this broad overview, though, keep 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, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
One thing I would like to bring into light with NGD is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in NGD’s case is 80%. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.
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NGD’s company page on Simply Wall St. I’ve also compiled a list of essential factors you should further examine:” data-reactid=”50″There are too many aspects of NGD to cover in one brief article, but the key fundamentals for the company can all be found in one place – NGD’s company page on Simply Wall St. I’ve also compiled a list of essential factors you should further examine:
- Valuation: What is NGD…
