Yahoo Finance Loss-Making Shekel Brainweigh Ltd. (ASX:SBW) Expected To Breakeven In The Medium-Term
Shekel Brainweigh Ltd. (ASX:SBW) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Shekel Brainweigh Ltd., together with its subsidiaries, operates as a digital weighing technology company worldwide. With the latest financial year loss of US$4.5m and a trailing-twelve-month loss of US$4.7m, the AU$30m market-cap company amplified its loss by moving further away from its breakeven target. Many investors are wondering about the rate at which Shekel Brainweigh will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
See our latest analysis for Shekel Brainweigh
Expectations from some of the Australian Software analysts is that Shekel Brainweigh is on the verge of breakeven. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$500k in 2022. The company is therefore projected to breakeven just over a year from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 103% is expected, 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 Shekel Brainweigh given that this is a high-level summary, but, bear in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before we wrap up, there’s one issue worth mentioning. Shekel Brainweigh currently has a debt-to-equity ratio of over 2x. 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:
There are key fundamentals of Shekel Brainweigh which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Shekel Brainweigh, take a look at Shekel Brainweigh's company page on Simply Wall St. We've also compiled a list of essential aspects you should look at:
Valuation: What is Shekel Brainweigh 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 Shekel Brainweigh 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 Shekel Brainweigh’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.
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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.
