With the business potentially at an important milestone, we thought we'd take a closer look at Lithium Americas (Argentina) Corp.'s (TSE:LAAC) future prospects. Lithium Americas (Argentina) Corp. operates as a resource company. The CA$1.3b market-cap company’s loss lessened since it announced a US$94m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$13m, as it approaches breakeven. Many investors are wondering about the rate at which Lithium Americas (Argentina) will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

View our latest analysis for Lithium Americas (Argentina)

Consensus from 6 of the Canadian Metals and Mining analysts is that Lithium Americas (Argentina) is on the verge of breakeven. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$65m in 2024. Therefore, the company is expected to breakeven roughly 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 1.5%, which is a somewhat cautious outlook. If this rate turns out to be too low, the company may become profitable faster than analysts expect. TSX:LAAC Earnings Per Share Growth January 4th 2024

Underlying developments driving Lithium Americas (Argentina)'s growth isn’t the focus of this broad overview, but, bear in mind 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, periods of lower growth in the upcoming years 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 16% 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:

This article is not intended to be a comprehensive analysis on Lithium Americas (Argentina), so if you are interested in understanding the company at a deeper level, take a look at Lithium Americas (Argentina)'s company page on Simply Wall St. We've also put together a list of key aspects you should look at:

Historical Track Record: What has Lithium Americas (Argentina)'s performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Lithium Americas (Argentina)'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.