SeaBird Exploration Plc’s (OB:SBX) Shift From Loss To Profit

SeaBird Exploration Plc’s (OB:SBX): SeaBird Exploration Plc, through its subsidiaries, provides marine 2D and 3D seismic data for the oil and gas industry in Europe, Africa, the Middle East, North and South America, and the Asia Pacific. The kr119m market-cap company’s loss lessens since it announced a US$23.3m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$23.2m, as it approaches breakeven. The most pressing concern for investors is SBX’s path to profitability – when will it breakeven? In this article, I will touch on the expectations for SBX’s growth and when analysts expect the company to become profitable.

See our latest analysis for SeaBird Exploration

SBX is bordering on breakeven, according to the 2 Energy Services analysts. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$16m in 2021. So, SBX is predicted to breakeven approximately a few months from now. How fast will SBX have to grow each year in order to reach the breakeven point by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 96% 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.

earnings-per-share-growth
OB:SBX Earnings Per Share Growth July 13th 2020

I’m not going to go through company-specific developments for SBX given that this is a high-level summary, though, keep in mind that by and large energy companies, depending on the stage of operation and resource produced, have irregular periods of cash flow. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before I wrap up, there’s one aspect worth mentioning. SBX has managed its capital judiciously, with debt making up 11% of equity. This means that SBX 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 SBX to cover in one brief article, but the key fundamentals for the company can all be found in one place – SBX’s company page on Simply Wall St. I’ve also put together a list of important aspects you should further research:

  1. Valuation: What is SBX 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 SBX 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 SeaBird Exploration’s board and the CEO’s back ground.
  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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