With the business potentially at an important milestone, we thought we'd take a closer look at IGas Energy plc's (LON:IGAS) future prospects. IGas Energy plc operates as an oil and gas development, exploration, and production company in the United Kingdom. On 31 December 2021, the UK£43m market-cap company posted a loss of UK£6.0m for its most recent financial year. As path to profitability is the topic on IGas Energy's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.
According to some industry analysts covering IGas Energy, breakeven is near. They expect the company to post a final loss in 2021, before turning a profit of UK£13m in 2022. Therefore, the company is expected to breakeven roughly 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 41%, which is extremely buoyant. 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 IGas Energy's upcoming projects, however, take into account that generally an energy business has lumpy cash flows which are contingent on the natural resource and stage at which the company is operating. 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 aspect worth mentioning. The company has managed its capital prudently, with debt making up 22% 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 too many aspects of IGas Energy to cover in one brief article, but the key fundamentals for the company can all be found in one place – IGas Energy's company page on Simply Wall St. We've also put together a list of key aspects you should further research:
Valuation: What is IGas Energy 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 IGas Energy 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 IGas Energy’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.