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EKINOPS SA’s (EPA:EKI): EKINOPS S.A. provides optical transport solutions for service providers and private networks worldwide. The €73.6m market-cap company’s loss lessens since it announced a -€6.5m bottom-line in the full financial year, compared to the latest trailing-twelve-month loss of -€5.2m, as it approaches breakeven. As path to profitability is the topic on EKI’s investors mind, I’ve decided to gauge market sentiment. Below I will provide a high-level summary of the industry analysts’ expectations for EKI.
See our latest analysis for EKINOPS
Expectation from Communications analysts is EKI is on the verge of breakeven. They anticipate the company to incur a final loss in 2018, before generating positive profits of €1.8m in 2019. Therefore, EKI is expected to breakeven roughly a couple of months from now! What rate will EKI have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 107%, 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, I won’t go into details of EKI’s upcoming projects, though, keep in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing I’d like to point out is that EKI has managed its capital judiciously, with debt making up 14.2% of equity. This means that EKI 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 EKI, so if you are interested in understanding the company at a deeper level, take a look at EKI’s company page on Simply Wall St. I’ve also put together a list of pertinent factors you should look at:
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Valuation: What is EKI 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 EKI 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 EKINOPS’s board and the CEO’s back ground.
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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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.