We feel now is a pretty good time to analyse Volt Information Sciences, Inc.'s (NYSEMKT:VOLT) business as it appears the company may be on the cusp of a considerable accomplishment. Volt Information Sciences, Inc. provides traditional time, materials-based, and project-based staffing services in the United States, Europe, Canada, and the Asia Pacific. With the latest financial year loss of US$34m and a trailing-twelve-month loss of US$25m, the US$84m market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which Volt Information Sciences will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.
Expectations from some of the American Professional Services analysts is that Volt Information Sciences is on the verge of breakeven. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$1.7m in 2021. The company is therefore projected to breakeven around a year from now or less! We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 155% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving Volt Information Sciences' growth isn’t the focus of this broad overview, though, bear in mind that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before we wrap up, there’s one issue worth mentioning. Volt Information Sciences currently has a debt-to-equity ratio of over 2x. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk around investing in the loss-making company.
There are key fundamentals of Volt Information Sciences 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 Volt Information Sciences, take a look at Volt Information Sciences' company page on Simply Wall St. We've also compiled a list of relevant aspects you should further examine:
Valuation: What is Volt Information Sciences 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 Volt Information Sciences 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 Volt Information Sciences’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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