Analysts Expect KLX Energy Services Holdings, Inc. (NASDAQ:KLXE) To Breakeven Soon
We feel now is a pretty good time to analyse KLX Energy Services Holdings, Inc.'s (NASDAQ:KLXE) business as it appears the company may be on the cusp of a considerable accomplishment. KLX Energy Services Holdings, Inc. provides drilling, completions, production, and well intervention services and products to the onshore oil and gas producing regions of the United States. On 31 December 2022, the US$197m market-cap company posted a loss of US$3.1m for its most recent financial year. Many investors are wondering about the rate at which KLX Energy Services Holdings will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
See our latest analysis for KLX Energy Services Holdings
KLX Energy Services Holdings is bordering on breakeven, according to the 2 American Energy Services analysts. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$78m in 2023. 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 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 83% 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.
We're not going to go through company-specific developments for KLX Energy Services Holdings given that this is a high-level summary, however, bear in mind that generally energy companies, depending on the stage of operation and resource produced, have irregular periods of cash flow. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
Before we wrap up, there’s one issue worth mentioning. KLX Energy Services Holdings currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. These losses tend to occur only on paper, however, in other cases it can be forewarning.
Next Steps:
This article is not intended to be a comprehensive analysis on KLX Energy Services Holdings, so if you are interested in understanding the company at a deeper level, take a look at KLX Energy Services Holdings' company page on Simply Wall St. We've also put together a list of relevant aspects you should further examine:
Historical Track Record: What has KLX Energy Services Holdings' performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on KLX Energy Services Holdings' 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
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