SATO Technologies Corp. (CVE:SATO) On The Verge Of Breaking Even

We feel now is a pretty good time to analyse SATO Technologies Corp.'s (CVE:SATO) business as it appears the company may be on the cusp of a considerable accomplishment. SATO Technologies Corp., a blockchain company, engages in the cryptocurrency mining in Quebec, Canada. The CA$29m market-cap company posted a loss in its most recent financial year of CA$8.0m and a latest trailing-twelve-month loss of CA$2.3m shrinking the gap between loss and breakeven. As path to profitability is the topic on SATO Technologies' investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for SATO Technologies

According to some industry analysts covering SATO Technologies, breakeven is near. They expect the company to post a final loss in 2022, before turning a profit of CA$846k in 2023. So, the company is predicted to breakeven approximately 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 153% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won’t go into details of SATO Technologies' upcoming projects, but, take into account that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we would like to bring into light with SATO Technologies is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in SATO Technologies' case is 53%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

There are too many aspects of SATO Technologies to cover in one brief article, but the key fundamentals for the company can all be found in one place – SATO Technologies' company page on Simply Wall St. We've also compiled a list of key aspects you should further research:

1. Valuation: What is SATO Technologies 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 SATO Technologies 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 SATO Technologies’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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.