Superloop Limited (ASX:SLC) Is About To Turn The Corner

Superloop Limited (ASX:SLC) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Superloop Limited, together with its subsidiaries, operates as a telecommunications and internet service provider in Australia. On 30 June 2024, the AU$1.2b market-cap company posted a loss of AU$15m for its most recent financial year. As path to profitability is the topic on Superloop's investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

See our latest analysis for Superloop

According to the 7 industry analysts covering Superloop, the consensus is that breakeven is near. They expect the company to post a final loss in 2024, before turning a profit of AU$4.1m in 2025. Therefore, the company is expected to breakeven roughly a year from now or less! We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 49% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for Superloop given that this is a high-level summary, though, keep in mind that generally 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 13% 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 Superloop, so if you are interested in understanding the company at a deeper level, take a look at Superloop's company page on Simply Wall St. We've also compiled a list of relevant aspects you should look at:

1. Valuation: What is Superloop 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 Superloop 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 Superloop’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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.