Team, Inc. (NYSE:TISI): When Will It Breakeven?

Team, Inc. (NYSE:TISI) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Team, Inc., together with its subsidiaries, provides asset performance assurance and optimization solutions in the United States, Canada, Europe, and internationally. The US$350m market-cap company announced a latest loss of US$237m on 31 December 2020 for its most recent financial year result. Many investors are wondering about the rate at which Team will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

See our latest analysis for Team

Consensus from 3 of the American Commercial Services analysts is that Team is on the verge of breakeven. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$1.6m in 2022. The company is therefore projected to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 141% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Team's growth isn’t the focus of this broad overview, however, bear 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 we would like to bring into light with Team is its debt-to-equity ratio of 143%. Typically, debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Team, so if you are interested in understanding the company at a deeper level, take a look at Team's company page on Simply Wall St. We've also put together a list of key aspects you should further research:

1. Valuation: What is Team 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 Team 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 Team’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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