When Can We Expect A Profit From Staffing 360 Solutions Inc (NASDAQ:STAF)?

Staffing 360 Solutions Inc’s (NASDAQ:STAF): Staffing 360 Solutions, Inc., a staffing company, engages in the acquisition of staffing companies in the United States and the United Kingdom. With the latest financial year loss of -US$6.39M and a trailing-twelve month of -US$9.48M, the US$9.08M market-cap amplifies its loss by moving further away from its breakeven target. Many investors are wondering the rate at which STAF will turn a profit, with the big question being “when will the company breakeven?” In this article, I will touch on the expectations for STAF’s growth and when analysts expect the company to become profitable.

Check out our latest analysis for Staffing 360 Solutions

STAF is bordering on breakeven, according to analysts. They expect the company to post a final loss in 2018, before turning a profit of US$301.00K in 2019. STAF is therefore projected to breakeven around a few months from now. In order to meet this breakeven date, I calculated the rate at which STAF must grow year-on-year. It turns out an average annual growth rate of 96.98% is expected, which is rather optimistic! If this rate turns out to be too aggressive, STAF may become profitable much later than analysts predict.

NasdaqCM:STAF Past Future Earnings Mar 27th 18
NasdaqCM:STAF Past Future Earnings Mar 27th 18

I’m not going to go through company-specific developments for STAF given that this is a high-level summary, however, bear in mind that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before I wrap up, there’s one issue worth mentioning. STAF currently has a debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, which in STAF’s case, it has significantly overshot. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

There are too many aspects of STAF to cover in one brief article, but the key fundamentals for the company can all be found in one place – STAF’s company page on Simply Wall St. I’ve also put together a list of pertinent aspects you should look at:

  1. Valuation: What is STAF 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 STAF 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 Staffing 360 Solutions’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.