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SKY Network Television Limited's (NZSE:SKT) About To Shift From Loss To Profit

Simply Wall St
·3 min read

With the business potentially at an important milestone, we thought we'd take a closer look at SKY Network Television Limited's (NZSE:SKT) future prospects. SKY Network Television Limited, an entertainment company, provides sport and entertainment media services in New Zealand and internationally. The NZ$295m market-cap company announced a latest loss of NZ$157m on 30 June 2020 for its most recent financial year result. The most pressing concern for investors is SKY Network Television'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.

See our latest analysis for SKY Network Television

Consensus from 6 of the New Zealander Media analysts is that SKY Network Television is on the verge of breakeven. They anticipate the company to incur a final loss in 2020, before generating positive profits of NZ$20m in 2021. So, the company is predicted to breakeven approximately a year 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 82%, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

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

Underlying developments driving SKY Network Television's growth isn’t the focus of this broad overview, though, take into account that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 27% 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.

Next Steps:

There are too many aspects of SKY Network Television to cover in one brief article, but the key fundamentals for the company can all be found in one place – SKY Network Television's company page on Simply Wall St. We've also put together a list of key aspects you should look at:

  1. Valuation: What is SKY Network Television 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 SKY Network Television 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 SKY Network Television’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.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.