FLYHT Aerospace Solutions Ltd.'s (CVE:FLY) Path To Profitability
FLYHT Aerospace Solutions Ltd. (CVE:FLY) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. FLYHT Aerospace Solutions Ltd. provides real-time communications with aircrafts for the aerospace industry. With the latest financial year loss of CA$747k and a trailing-twelve-month loss of CA$2.5m, the CA$15m market-cap company amplified its loss by moving further away from its breakeven target. The most pressing concern for investors is FLYHT Aerospace Solutions' path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
Check out our latest analysis for FLYHT Aerospace Solutions
According to some industry analysts covering FLYHT Aerospace Solutions, breakeven is near. They anticipate the company to incur a final loss in 2021, before generating positive profits of CA$3.5m in 2022. So, the company is predicted to breakeven approximately 2 years from today. 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 82% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Underlying developments driving FLYHT Aerospace Solutions' growth isn’t the focus of this broad overview, but, keep in mind that generally 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 issue worth mentioning. FLYHT Aerospace Solutions currently has a debt-to-equity ratio of 118%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. Note that a higher debt obligation increases the risk around investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on FLYHT Aerospace Solutions, so if you are interested in understanding the company at a deeper level, take a look at FLYHT Aerospace Solutions' company page on Simply Wall St. We've also put together a list of relevant factors you should further examine:
Historical Track Record: What has FLYHT Aerospace Solutions' 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 FLYHT Aerospace Solutions' 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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