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Star Energy Group Plc (LON:STAR) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Star Energy Group Plc operates as an oil and gas exploration, development, processing, and production company in the United Kingdom. On 31 December 2023, the UK£10m market-cap company posted a loss of UK£4.5m for its most recent financial year. The most pressing concern for investors is Star Energy Group's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.
See our latest analysis for Star Energy Group
Consensus from 2 of the British Oil and Gas analysts is that Star Energy Group is on the verge of breakeven. They expect the company to post a final loss in 2023, before turning a profit of UK£4.1m in 2024. 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 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 69% year-on-year, on average, 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 Star Energy Group's upcoming projects, though, take into account that generally energy companies, depending on the stage of operation and resource produced, have irregular periods of cash flow. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.
Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 9.8% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on Star Energy Group, so if you are interested in understanding the company at a deeper level, take a look at Star Energy Group's company page on Simply Wall St. We've also put together a list of pertinent factors you should further examine:
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Valuation: What is Star Energy Group 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 Star Energy Group is currently mispriced by the market.
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Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Star Energy Group’s board and the CEO’s background.
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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.