When Will Sky and Space Global Limited (ASX:SAS) Turn A Profit?

Sky and Space Global Limited’s (ASX:SAS): Sky and Space Global Limited operates as a nano-satellite technology company. The company’s loss has recently broadened since it announced a -AU$14.86M loss in the full financial year, compared to the latest trailing-twelve-month loss of -AU$15.25M, moving it further away from breakeven. The most pressing concern for investors is SAS’s path to profitability – when will it breakeven? Below I will provide a high-level summary of the industry analysts’ expectations for SAS.

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According to the industry analysts covering SAS, breakeven is near. They anticipate the company to incur a final loss in 2019, before generating positive profits of AU$28.00M in 2020. So, SAS is predicted to breakeven approximately 2 years from today. 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 115.06% 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.

ASX:SAS Past Future Earnings May 9th 18
ASX:SAS Past Future Earnings May 9th 18

Underlying developments driving SAS’s growth isn’t the focus of this broad overview, though, take into account that generally 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 typically has high 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:

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

  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.