TMC the metals company Inc. (NASDAQ:TMC) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. TMC the metals company Inc., a deep-sea minerals exploration company, focuses on the collection, processing, and refining of polymetallic nodules found on the seafloor in California. The company's loss has recently broadened since it announced a US$74m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$85m, moving it further away from breakeven. Many investors are wondering about the rate at which TMC the metals will turn a profit, with the big question being "when will the company breakeven?" Below we will provide a high-level summary of the industry analysts' expectations for the company.
According to the 2 industry analysts covering TMC the metals, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$17m in 2026. Therefore, the company is expected to breakeven roughly 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 81% 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.
Given this is a high-level overview, we won't go into details of TMC the metals' upcoming projects, however, bear in mind that generally 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. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
Before we wrap up, there's one aspect worth mentioning. TMC the metals currently has no debt on its balance sheet, which is rare for a loss-making metals and mining company, which typically has high debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.
Next Steps:
There are key fundamentals of TMC the metals which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at TMC the metals, take a look at TMC the metals' company page on Simply Wall St. We've also compiled a list of important factors you should look at:
- Valuation: What is TMC the 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 TMC the metals is currently mispriced by the market.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on TMC the metals's board and the CEO's background.
- 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.
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