Analysts Expect Breakeven For MSL Solutions Limited (ASX:MSL)

MSL Solutions Limited (ASX:MSL) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. MSL Solutions Limited provides hosted, software as a service, and on-site deployed solutions. The AU$23m market-cap company announced a latest loss of AU$16.4m on 30 June 2020 for its most recent financial year result. The most pressing concern for investors is MSL Solutions' path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for MSL Solutions

According to some industry analysts covering MSL Solutions, breakeven is near. They expect the company to post a final loss in 2021, before turning a profit of AU$300k in 2022. The company is therefore projected to breakeven around 2 years from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 142% is expected, 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 MSL Solutions' upcoming projects, but, keep in mind that by and large a high growth rate 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 prudently, with debt making up 7.9% 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:

There are too many aspects of MSL Solutions to cover in one brief article, but the key fundamentals for the company can all be found in one place – MSL Solutions' company page on Simply Wall St. We've also compiled a list of relevant aspects you should look at:

1. Historical Track Record: What has MSL Solutions' 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 MSL Solutions' 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. 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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