Trakcja PRKiI S.A. (WSE:TRK): When Will It Breakeven?

We feel now is a pretty good time to analyse Trakcja PRKiI S.A.'s (WSE:TRK) business as it appears the company may be on the cusp of a considerable accomplishment. Trakcja PRKiI S.A. operates in the infrastructure and energy construction sector in Poland and internationally. The zł214m market-cap company announced a latest loss of zł110m on 31 December 2020 for its most recent financial year result. The most pressing concern for investors is Trakcja PRKiI's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

View our latest analysis for Trakcja PRKiI

According to some industry analysts covering Trakcja PRKiI, breakeven is near. They expect the company to post a final loss in 2021, before turning a profit of zł13m in 2022. So, the company is predicted to breakeven just over a year from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 138%, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of Trakcja PRKiI's upcoming projects, though, bear in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one issue worth mentioning. Trakcja PRKiI currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Trakcja PRKiI's case is 90%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Trakcja PRKiI, so if you are interested in understanding the company at a deeper level, take a look at Trakcja PRKiI's company page on Simply Wall St. We've also compiled a list of important factors you should look at:

1. Valuation: What is Trakcja PRKiI 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 Trakcja PRKiI 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 Trakcja PRKiI’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. 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.
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