Nasstar plc’s (LON:NASA) Path To Profitability

Nasstar plc’s (LON:NASA): Nasstar plc, together with its subsidiaries, provides hosted managed and cloud computing services primarily in the United Kingdom. The UK£68.62m market-cap company announced a latest loss of -UK£1.05m on 31 December 2017 for its most recent financial year result. Many investors are wondering the rate at which NASA 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 NASA, its year of breakeven and its implied growth rate.

Check out our latest analysis for Nasstar

Expectation from Internet analysts is NASA is on the verge of breakeven. They anticipate the company to incur a final loss in -1, before generating positive profits of UK£0 in . NASA is therefore projected to breakeven around a couple of months from now! In order to meet this breakeven date, I calculated the rate at which NASA must grow year-on-year. It turns out an average annual growth rate of 23.61% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, NASA may become profitable much later than analysts predict.

AIM:NASA Past Future Earnings June 22nd 18
AIM:NASA Past Future Earnings June 22nd 18

Given this is a high-level overview, I won’t go into details of NASA’s upcoming projects, though, keep in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing I’d like to point out is that NASA has managed its capital prudently, with debt making up 15.67% of equity. This means that NASA 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 NASA, so if you are interested in understanding the company at a deeper level, take a look at NASA’s company page on Simply Wall St. I’ve also put together a list of essential factors you should further research:

  1. Valuation: What is NASA 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 NASA 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 Nasstar’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.