Analysts Are Optimistic We'll See A Profit From Globalstar, Inc. (NASDAQ:GSAT)

With the business potentially at an important milestone, we thought we'd take a closer look at Globalstar, Inc.'s (NASDAQ:GSAT) future prospects. Globalstar, Inc. provides mobile satellite services in the United States, Canada, Europe, Central and South America, and internationally. The company’s loss has recently broadened since it announced a US$35m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$39m, moving it further away from breakeven. As path to profitability is the topic on Globalstar's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for Globalstar

Consensus from 3 of the American Telecom analysts is that Globalstar is on the verge of breakeven. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$3.5m in 2025. Therefore, the company is expected to breakeven roughly 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 97% year-on-year, on average, which is extremely buoyant. 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 Globalstar's upcoming projects, however, bear in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one issue worth mentioning. Globalstar currently has a debt-to-equity ratio of 100%. Generally, the rule of thumb is 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 Globalstar, so if you are interested in understanding the company at a deeper level, take a look at Globalstar's company page on Simply Wall St. We've also put together a list of relevant factors you should look at:

1. Valuation: What is Globalstar 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 Globalstar 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 Globalstar’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. 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.