Analysts Expect Breakeven For Sky and Space Global Limited (ASX:SAS)

Sky and Space Global Limited’s (ASX:SAS): Sky and Space Global Limited operates as a nano-satellite technology company. The AU$100m market-cap company announced a latest loss of -AU$8.3m on 30 June 2018 for its most recent financial year result. As path to profitability is the topic on SAS’s investors mind, I’ve decided to gauge market sentiment. In this article, I will touch on the expectations for SAS’s growth and when analysts expect the company to become profitable.

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Consensus from the 2 Telecom analysts is SAS is on the verge of breakeven. They expect the company to post a final loss in 2019, before turning a profit of AU$23m in 2020. SAS is therefore projected to breakeven around a couple of months from now! How fast will SAS 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 88% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, SAS may become profitable much later than analysts predict.

ASX:SAS Past Future Earnings January 21st 19
ASX:SAS Past Future Earnings January 21st 19

Underlying developments driving SAS’s growth isn’t the focus of this broad overview, but, keep in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before I wrap up, there’s one aspect worth mentioning. SAS currently has no debt on its balance sheet, which is quite unusual for a cash-burning loss-making, growth company, which usually has a high level of debt relative to its equity. SAS currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

There are key fundamentals of SAS which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at SAS, take a look at SAS’s company page on Simply Wall St. I’ve also put together a list of pertinent factors you should further examine:

  1. Valuation: What is SAS 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 SAS 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 Sky andce Global’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.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.