Prairie Operating Co. (NASDAQ:PROP) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Prairie Operating Co., an independent energy company, engages in the acquisition, development, and production of crude oil, natural gas, and natural gas liquids in the United States. The US$170m market-cap company announced a latest loss of US$40m on 31 December 2024 for its most recent financial year result. The most pressing concern for investors is Prairie Operating's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

According to some industry analysts covering Prairie Operating, breakeven is near. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$252m in 2025. Therefore, the company is expected to breakeven roughly 12 months from now or less. We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 51% is expected, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for Prairie Operating given that this is a high-level summary, however, bear in mind that generally an energy business has lumpy cash flows which are contingent on the natural resource 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.

See our latest analysis for Prairie Operating

Before we wrap up, there’s one issue worth mentioning. Prairie Operating currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Prairie Operating's case is 86%. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

There are key fundamentals of Prairie Operating 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 Prairie Operating, take a look at Prairie Operating's company page on Simply Wall St. We've also put together a list of important factors you should further research:

1. Valuation: What is Prairie Operating 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 Prairie Operating 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 Prairie Operating’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.

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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.