We Might See A Profit From QTS Realty Trust, Inc. (NYSE:QTS) Soon

By
Simply Wall St
Published
July 12, 2021
Source: Shutterstock

We feel now is a pretty good time to analyse QTS Realty Trust, Inc.'s (NYSE:QTS) business as it appears the company may be on the cusp of a considerable accomplishment. QTS Realty Trust, Inc. (NYSE: QTS) is a leading provider of data center solutions across a diverse footprint spanning more than 7 million square feet of owned data center space throughout primarily North America and Europe. The company’s loss has recently broadened since it announced a US$29m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$32m, moving it further away from breakeven. The most pressing concern for investors is QTS Realty Trust's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for QTS Realty Trust

Consensus from 17 of the American REITs analysts is that QTS Realty Trust is on the verge of breakeven. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$4.3m in 2021. The company is therefore projected to breakeven around 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 59% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
NYSE:QTS Earnings Per Share Growth July 13th 2021

Given this is a high-level overview, we won’t go into details of QTS Realty Trust's upcoming projects, though, keep in mind that generally 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 QTS Realty Trust is its debt-to-equity ratio of 102%. 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.

Next Steps:

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

  1. Valuation: What is QTS Realty Trust 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 QTS Realty Trust 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 QTS Realty Trust’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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