When Will Superloop Limited (ASX:SLC) Become Profitable?

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We feel now is a pretty good time to analyse Superloop Limited's (ASX:SLC) business as it appears the company may be on the cusp of a considerable accomplishment. Superloop Limited engages in the provision of design, construction, and operation connectivity services. On 30 June 2022, the AU$365m market-cap company posted a loss of AU$62m for its most recent financial year. As path to profitability is the topic on Superloop'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.

Check out our latest analysis for Superloop

Consensus from 4 of the Australian Telecom analysts is that Superloop is on the verge of breakeven. They anticipate the company to incur a final loss in 2023, before generating positive profits of AU$3.5m in 2024. So, the company is predicted to breakeven approximately 2 years from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 106%, which is rather optimistic! 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

Given this is a high-level overview, we won’t go into details of Superloop's upcoming projects, though, bear in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 9.7% 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:

This article is not intended to be a comprehensive analysis on Superloop, so if you are interested in understanding the company at a deeper level, take a look at Superloop's company page on Simply Wall St. We've also compiled a list of essential aspects you should further research:

  1. Valuation: What is Superloop 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 Superloop 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 Superloop’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.

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