When Will Platform Specialty Products Corporation (NYSE:PAH) Breakeven?
Platform Specialty Products Corporation’s (NYSE:PAH): Platform Specialty Products Corporation produces and sells specialty chemical products worldwide. The US$3.30b market-cap posted a loss in its most recent financial year of -US$296.20m and a latest trailing-twelve-month loss of -US$234.50m shrinking the gap between loss and breakeven. The most pressing concern for investors is PAH’s path to profitability – when will it breakeven? Below I will provide a high-level summary of the industry analysts’ expectations for PAH.
See our latest analysis for Platform Specialty Products
PAH is bordering on breakeven, according to Chemicals analysts. They anticipate the company to incur a final loss in 2017, before generating positive profits of US$125.00m in 2018. PAH is therefore projected to breakeven around a few months from now. How fast will PAH have to grow each year in order to reach the breakeven point by 2018? Working backwards from analyst estimates, it turns out that they expect the company to grow 112.26% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, PAH may become profitable much later than analysts predict.
Given this is a high-level overview, I won’t go into details of PAH’s upcoming projects, however, keep in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before I wrap up, there’s one issue worth mentioning. PAH currently has a debt-to-equity ratio of 189.15%. Typically, debt shouldn’t exceed 40% of your equity, and PAH has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on PAH, so if you are interested in understanding the company at a deeper level, take a look at PAH’s company page on Simply Wall St. I’ve also compiled a list of relevant factors you should further examine:
Valuation: What is PAH 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 PAH 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 Platform Specialty Products’s board and the CEO’s back ground.
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.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
