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Team, Inc. (NYSE:TISI) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Team, Inc., together with its subsidiaries, provides asset performance assurance and optimization solutions in the United States, Canada, Europe, and internationally. On 31 December 2020, the US$350m market-cap company posted a loss of US$237m for its most recent financial year. As path to profitability is the topic on Team's investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
According to the 3 industry analysts covering Team, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$1.6m in 2022. So, the company is predicted to breakeven just over a year from now. 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 141%, which is extremely buoyant. 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 Team's upcoming projects, but, 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 Team is its debt-to-equity ratio of 143%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.
This article is not intended to be a comprehensive analysis on Team, so if you are interested in understanding the company at a deeper level, take a look at Team's company page on Simply Wall St. We've also compiled a list of important factors you should further research:
Valuation: What is Team 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 Team 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 Team’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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