Straker Translations Limited’s (ASX:STG): Straker Translations Limited operates in the language services industry. The AU$70m market-cap company’s loss lessens since it announced a -NZ$1.5m bottom-line in the full financial year, compared to the latest trailing-twelve-month loss of -NZ$683.3k, as it approaches breakeven. The most pressing concern for investors is STG’s path to profitability – when will it breakeven? I’ve put together a brief outline of industry analyst expectations for STG, its year of breakeven and its implied growth rate.
STG is bordering on breakeven, according to Interactive Media and Services analysts. They anticipate the company to incur a final loss in 2019, before generating positive profits of NZ$700k in 2020. So, STG is predicted to breakeven approximately a few months from now. How fast will STG have to grow each year in order to reach the breakeven point by 2020? Working backwards from analyst estimates, it turns out that they expect the company to grow 114% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving STG’s growth isn’t the focus of this broad overview, though, keep in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing I’d like to point out is that STG has no debt on its balance sheet, which is rare for a loss-making loss-making, growth company, which usually has a high level of debt relative to its equity. STG currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
This article is not intended to be a comprehensive analysis on STG, so if you are interested in understanding the company at a deeper level, take a look at STG’s company page on Simply Wall St. I’ve also put together a list of important factors you should further research:
- Valuation: What is STG 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 STG is currently mispriced by the market.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Straker Translations’s board and the CEO’s back ground.
- 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.