With the business potentially at an important milestone, we thought we'd take a closer look at American West Metals Limited's (ASX:AW1) future prospects. American West Metals Limited, together with its subsidiaries, engages in the acquisition, exploration, and development of mineral projects in the United States and Canada. The AU$30m market-cap company posted a loss in its most recent financial year of AU$17m and a latest trailing-twelve-month loss of AU$25m leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which American West 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.

American West Metals is bordering on breakeven, according to some Australian Metals and Mining analysts. They expect the company to post a final loss in 2026, before turning a profit of AU$25m in 2027. 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 2027? Working backwards from analyst estimates, it turns out that they expect the company to grow 86% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving American West Metals' growth isn’t the focus of this broad overview, though, take into account that typically metals and mining companies, depending on the stage of operation and metals mined, have irregular periods of cash flow. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

View our latest analysis for American West Metals

Before we wrap up, there’s one issue worth mentioning. American West Metals currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. These losses tend to occur only on paper, however, in other cases it can be forewarning.

Next Steps:

There are key fundamentals of American West 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 American West Metals, take a look at American West Metals' company page on Simply Wall St. We've also compiled a list of key factors you should further examine:

1. Historical Track Record: What has American West Metals' 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.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on American West Metals' 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.