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When Will Frank's International N.V. (NYSE:FI) Breakeven?

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Frank's International N.V.'s (NYSE:FI): Frank's International N.V. provides various engineered tubular services for the oil and gas exploration and production, and oilfield services companies in the United States, Europe, the Middle East, Africa, Latin America, the Asia Pacific, and internationally. The US$1.1b market-cap posted a loss in its most recent financial year of -US$90.7m and a latest trailing-twelve-month loss of -US$66.3m shrinking the gap between loss and breakeven. As path to profitability is the topic on FI’s investors mind, I’ve decided to gauge market sentiment. I’ve put together a brief outline of industry analyst expectations for FI, its year of breakeven and its implied growth rate.

View our latest analysis for Frank's International

FI is bordering on breakeven, according to the 10 Energy Services analysts. They expect the company to post a final loss in 2021, before turning a profit of US$55m in 2022. FI is therefore projected to breakeven around 3 years from today. In order to meet this breakeven date, I calculated the rate at which FI must grow year-on-year. It turns out an average annual growth rate of 76% is expected, which signals high confidence from analysts. If this rate turns out to be too aggressive, FI may become profitable much later than analysts predict.

NYSE:FI Past and Future Earnings, September 13th 2019
NYSE:FI Past and Future Earnings, September 13th 2019

Given this is a high-level overview, I won’t go into details of FI’s upcoming projects, but, take into account that generally oil and gas companies, depending on the stage of operation and resource produced, have irregular periods of cash flow. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before I wrap up, there’s one aspect worth mentioning. FI has managed its capital prudently, with debt making up 0.2% of equity. This means that FI 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:

This article is not intended to be a comprehensive analysis on FI, so if you are interested in understanding the company at a deeper level, take a look at FI’s company page on Simply Wall St. I’ve also put together a list of important factors you should look at:

  1. Historical Track Record: What has FI's 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.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Frank's International’s board and the CEO’s back ground.

  3. 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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.