Yahoo Finance When Will 5G Networks Limited (ASX:5GN) Turn A Profit?
We feel now is a pretty good time to analyse 5G Networks Limited's (ASX:5GN) business as it appears the company may be on the cusp of a considerable accomplishment. 5G Networks Limited, together with its subsidiaries, operates as a licensed telecommunications carrier in Australia. On 30 June 2020, the AU$162m market-cap company posted a loss of AU$1.5m for its most recent financial year. Many investors are wondering about the rate at which 5G Networks 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.
View our latest analysis for 5G Networks
5G Networks is bordering on breakeven, according to some Australian Telecom analysts. They expect the company to post a final loss in 2021, before turning a profit of AU$1.5m in 2022. So, the company is predicted 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 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 91% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving 5G Networks' growth isn’t the focus of this broad overview, 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’d like to point out is that The company has managed its capital judiciously, with debt making up 9.9% 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:
There are too many aspects of 5G Networks to cover in one brief article, but the key fundamentals for the company can all be found in one place – 5G Networks' company page on Simply Wall St. We've also put together a list of relevant aspects you should look at:
Valuation: What is 5G Networks 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 5G Networks is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on 5G Networks’s board and the CEO’s background.
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.
This article by Simply Wall St is general in nature. 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.
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