Skyfii Limited (ASX:SKF): Are Analysts Optimistic?

By
Simply Wall St
Published
March 26, 2021
ASX:SKF
Source: Shutterstock

Skyfii Limited (ASX:SKF) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Skyfii Limited, a software technology company, provides data analytics services in Australia, North America, the United Kingdom, rest of Europe, and internationally. With the latest financial year loss of AU$3.4m and a trailing-twelve-month loss of AU$3.3m, the AU$66m market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which Skyfii 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.

Check out our latest analysis for Skyfii

Expectations from some of the Australian Software analysts is that Skyfii is on the verge of breakeven. They expect the company to post a final loss in 2021, before turning a profit of AU$600k in 2022. So, the company is predicted to breakeven just over a year from now. 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 125% is expected, 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
ASX:SKF Earnings Per Share Growth March 26th 2021

We're not going to go through company-specific developments for Skyfii given that this is a high-level summary, though, bear 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 5.8% 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:

This article is not intended to be a comprehensive analysis on Skyfii, so if you are interested in understanding the company at a deeper level, take a look at Skyfii's company page on Simply Wall St. We've also compiled a list of relevant factors you should further examine:

  1. Valuation: What is Skyfii 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 Skyfii 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 Skyfii’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. 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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