Analysts Expect Magseis Fairfield ASA (OB:MSEIS) To Breakeven Soon

Magseis Fairfield ASA (OB:MSEIS) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Magseis Fairfield ASA operates as a geophysical survey company in North Americas, Asia, Europe, and Africa. The kr1.6b market-cap company announced a latest loss of US$32m on 31 December 2021 for its most recent financial year result. Many investors are wondering about the rate at which Magseis Fairfield 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 Magseis Fairfield

Expectations from some of the Norwegian Energy Services analysts is that Magseis Fairfield is on the verge of breakeven. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$3.9m in 2022. 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 134% is expected, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for Magseis Fairfield given that this is a high-level summary, though, keep in mind 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.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 19% 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 key fundamentals of Magseis Fairfield which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Magseis Fairfield, take a look at Magseis Fairfield's company page on Simply Wall St. We've also put together a list of relevant aspects you should look at:

1. Historical Track Record: What has Magseis Fairfield's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Magseis Fairfield'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.