Cast SA (EPA:CAS): Is Breakeven Near?

Cast SA’s (EPA:CAS): Cast SA provides software analysis and measurement services to organizations and governments in North America, Europe, India, China, and internationally. The €57m market-cap company’s loss lessens since it announced a -€5.4m bottom-line in the full financial year, compared to the latest trailing-twelve-month loss of -€3.5m, as it approaches breakeven. Many investors are wondering the rate at which CAS will turn a profit, with the big question being “when will the company breakeven?” I’ve put together a brief outline of industry analyst expectations for CAS, its year of breakeven and its implied growth rate.

See our latest analysis for Cast

According to the 4 industry analysts covering CAS, the consensus is breakeven is near. They anticipate the company to incur a final loss in 2019, before generating positive profits of €1.1m in 2020. So, CAS is predicted to breakeven approximately a couple of months from now! In order to meet this breakeven date, I calculated the rate at which CAS must grow year-on-year. It turns out an average annual growth rate of 103% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

ENXTPA:CAS Past and Future Earnings, September 24th 2019
ENXTPA:CAS Past and Future Earnings, September 24th 2019

Given this is a high-level overview, I won’t go into details of CAS’s upcoming projects, but, bear in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing I’d like to point out is that CAS has managed its capital prudently, with debt making up 10% of equity. This means that CAS 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:

There are key fundamentals of CAS 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 CAS, take a look at CAS’s company page on Simply Wall St. I’ve also compiled a list of key factors you should further examine:

  1. Valuation: What is CAS 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 CAS 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 Cast’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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.