When Will Ophir Energy Plc (LON:OPHR) Breakeven?

Ophir Energy Plc’s (LON:OPHR): Ophir Energy plc engages in the exploration, development, and production of upstream oil and gas properties in Asia and Africa. The UK£362.00m market-cap company announced a latest loss of -UK£111.79m on 31 December 2017 for its most recent financial year result. As path to profitability is the topic on OPHR’s investors mind, I’ve decided to gauge market sentiment. Below I will provide a high-level summary of the industry analysts’ expectations for OPHR.

Check out our latest analysis for Ophir Energy

Expectation from Oil and Gas analysts is OPHR is on the verge of breakeven. They anticipate the company to incur a final loss in 2017, before generating positive profits of UK£43.19m in 2018. Therefore, OPHR is expected to breakeven roughly a couple of months from now! How fast will OPHR have to grow each year in order to reach the breakeven point by 2018? Working backwards from analyst estimates, it turns out that they expect the company to grow 52.90% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, OPHR may become profitable much later than analysts predict.

LSE:OPHR Past Future Earnings June 28th 18
LSE:OPHR Past Future Earnings June 28th 18

Underlying developments driving OPHR’s growth isn’t the focus of this broad overview, however, take into account that by and large an oil and gas business has lumpy cash flows which are contingent on the natural resource and stage at which the company is operating. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

Before I wrap up, there’s one aspect worth mentioning. OPHR has managed its capital prudently, with debt making up 7.30% of equity. This means that OPHR 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 OPHR 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 OPHR, take a look at OPHR’s company page on Simply Wall St. I’ve also compiled a list of important factors you should further research:

  1. Valuation: What is OPHR 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 OPHR 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 Ophir Energy’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.