With the business potentially at an important milestone, we thought we'd take a closer look at Volt Information Sciences, Inc.'s (NYSEMKT:VOLT) future prospects. Volt Information Sciences, Inc. provides traditional time, materials-based, and project-based staffing services in the United States, Europe, Canada, and the Asia Pacific. On 01 November 2020, the US$66m market-cap company posted a loss of US$34m for its most recent financial year. As path to profitability is the topic on Volt Information Sciences' investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
Expectations from some of the American Professional Services analysts is that Volt Information Sciences is on the verge of breakeven. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$3.0m in 2021. 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 140% is expected, 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 Volt Information Sciences' upcoming projects, however, keep in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing we would like to bring into light with Volt Information Sciences is its debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk around investing in the loss-making company.
This article is not intended to be a comprehensive analysis on Volt Information Sciences, so if you are interested in understanding the company at a deeper level, take a look at Volt Information Sciences' company page on Simply Wall St. We've also compiled a list of relevant factors you should look at:
- Valuation: What is Volt Information Sciences 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 Volt Information Sciences is currently mispriced by the market.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Volt Information Sciences’s board and the CEO’s background.
- 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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