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We feel now is a pretty good time to analyse SKY Network Television Limited's (NZSE:SKT) business as it appears the company may be on the cusp of a considerable accomplishment. SKY Network Television Limited, an entertainment company, provides sport and entertainment media services in New Zealand and internationally. With the latest financial year loss of NZ$157m and a trailing-twelve-month loss of NZ$129m, the NZ$306m market-cap company alleviated its loss by moving closer towards its target of breakeven. As path to profitability is the topic on SKY Network Television's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
Consensus from 6 of the New Zealander Media analysts is that SKY Network Television is on the verge of breakeven. They expect the company to post a final loss in 2020, before turning a profit of NZ$44m in 2021. So, the company is predicted to breakeven approximately 12 months from now or less. At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 19%, which seems relatively fair. 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 SKY Network Television's upcoming projects, but, bear in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 25% 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.
There are key fundamentals of SKY Network Television 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 SKY Network Television, take a look at SKY Network Television's company page on Simply Wall St. We've also put together a list of important factors you should further examine:
Valuation: What is SKY Network Television 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 SKY Network Television 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 SKY Network Television’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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