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We Might See A Profit From International Game Technology PLC (NYSE:IGT) Soon

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·3 min read
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We feel now is a pretty good time to analyse International Game Technology PLC's (NYSE:IGT) business as it appears the company may be on the cusp of a considerable accomplishment. International Game Technology PLC operates and provides gaming technology products and services worldwide. The US$5.3b market-cap company posted a loss in its most recent financial year of US$939m and a latest trailing-twelve-month loss of US$210m shrinking the gap between loss and breakeven. The most pressing concern for investors is International Game Technology's 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 International Game Technology

Consensus from 9 of the American Hospitality analysts is that International Game Technology is on the verge of breakeven. They expect the company to post a final loss in 2020, before turning a profit of US$522m in 2021. So, the company is predicted to breakeven approximately 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 0.7% is expected, which is a somewhat cautious outlook. If this rate turns out to be too low, the company may become profitable faster than analysts expect.

earnings-per-share-growth
earnings-per-share-growth

Given this is a high-level overview, we won’t go into details of International Game Technology's upcoming projects, however, keep in mind that typically a low or volatile growth rate in the near future is not unusual, especially if the company is currently in an investment period.

Before we wrap up, there’s one issue worth mentioning. International Game Technology currently has a debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

There are too many aspects of International Game Technology to cover in one brief article, but the key fundamentals for the company can all be found in one place – International Game Technology's company page on Simply Wall St. We've also put together a list of important aspects you should further research:

  1. Valuation: What is International Game Technology 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 International Game Technology is currently mispriced by the market.

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

  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.

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.