International Seaways, Inc. (NYSE:INSW) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. International Seaways, Inc. owns and operates a fleet of oceangoing vessels for the transportation of crude oil and petroleum products in the International Flag trade. The company’s loss has recently broadened since it announced a US$5.5m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$216m, moving it further away from breakeven. The most pressing concern for investors is International Seaways' path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
According to the 7 industry analysts covering International Seaways, the consensus is that breakeven is near. They expect the company to post a final loss in 2021, before turning a profit of US$137m in 2022. Therefore, the company is expected to breakeven roughly a year 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 120% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, we won’t go into details of International Seaways' upcoming projects, however, bear in mind that typically an energy business has lumpy cash flows which are contingent on the natural resource and stage at which the company is operating. So, 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 International Seaways is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in International Seaways' case is 91%. Note that a higher debt obligation increases the risk around investing in the loss-making company.
There are too many aspects of International Seaways to cover in one brief article, but the key fundamentals for the company can all be found in one place – International Seaways' company page on Simply Wall St. We've also compiled a list of relevant factors you should further examine:
- Valuation: What is International Seaways 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 International Seaways 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 International Seaways’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.
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.