Globalstar, Inc. (NASDAQ:GSAT): Are Analysts Optimistic?

We feel now is a pretty good time to analyse Globalstar, Inc.'s (NASDAQ:GSAT) business as it appears the company may be on the cusp of a considerable accomplishment. 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$74m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$78m, moving it further away from breakeven. Many investors are wondering about the rate at which Globalstar will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

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Consensus from 2 of the American Telecom analysts is that Globalstar is on the verge of breakeven. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$8.7m in 2026. Therefore, the company is expected to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 113% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for Globalstar given that this is a high-level summary, however, take into account that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

View our latest analysis for Globalstar

Before we wrap up, there’s one issue worth mentioning. Globalstar currently has a debt-to-equity ratio of 146%. Typically, debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of Globalstar to cover in one brief article, but the key fundamentals for the company can all be found in one place – Globalstar's company page on Simply Wall St. We've also put together a list of key 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.