Shekel Brainweigh Ltd. (ASX:SBW): Are Analysts Optimistic?
With the business potentially at an important milestone, we thought we'd take a closer look at Shekel Brainweigh Ltd.'s (ASX:SBW) future prospects. Shekel Brainweigh Ltd., together with its subsidiaries, operates as a digital weighing technology company worldwide. On 31 December 2020, the AU$21m market-cap company posted a loss of US$4.4m for its most recent financial year. As path to profitability is the topic on Shekel Brainweigh'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.
See our latest analysis for Shekel Brainweigh
Expectations from some of the Australian Software analysts is that Shekel Brainweigh is on the verge of breakeven. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$1.3m in 2022. So, the company is predicted to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 148% year-on-year, on average, which is rather optimistic! 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 Shekel Brainweigh's upcoming projects, however, 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.
One thing we would like to bring into light with Shekel Brainweigh is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Shekel Brainweigh's case is 75%. Note that a higher debt obligation increases the risk in investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on Shekel Brainweigh, so if you are interested in understanding the company at a deeper level, take a look at Shekel Brainweigh's company page on Simply Wall St. We've also put together a list of key factors you should further research:
Valuation: What is Shekel Brainweigh 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 Shekel Brainweigh 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 Shekel Brainweigh’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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