Analysts Expect Star Energy Group Plc (LON:STAR) To Breakeven Soon

With the business potentially at an important milestone, we thought we'd take a closer look at Star Energy Group Plc's (LON:STAR) future prospects. Star Energy Group Plc operates as an oil and gas development, exploration, processing, and production company in the United Kingdom. The UK£14m market-cap company posted a loss in its most recent financial year of UK£12m and a latest trailing-twelve-month loss of UK£31m leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which Star Energy Group will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for Star Energy Group

Consensus from 2 of the British Oil and Gas analysts is that Star Energy Group is on the verge of breakeven. They anticipate the company to incur a final loss in 2023, before generating positive profits of UK£6.4m in 2024. Therefore, the company is expected to breakeven roughly 12 months 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 100% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Star Energy Group's growth isn’t the focus of this broad overview, however, take into account that generally energy companies, depending on the stage of operation and resource produced, have irregular periods of cash flow. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 8.8% 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:

There are too many aspects of Star Energy Group to cover in one brief article, but the key fundamentals for the company can all be found in one place – Star Energy Group's company page on Simply Wall St. We've also put together a list of pertinent factors you should further research:

1. Valuation: What is Star Energy Group 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 Star Energy Group 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 Star Energy Group’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.