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When Will Team, Inc. (NYSE:TISI) Turn A Profit?

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·3 min read
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Team, Inc.'s (NYSE:TISI): Team, Inc. provides specialty industrial services in the United States, Canada, Europe, and internationally. The US$413m market-cap posted a loss in its most recent financial year of -US$63.1m and a latest trailing-twelve-month loss of -US$21.2m shrinking the gap between loss and breakeven. As path to profitability is the topic on TISI’s investors mind, I’ve decided to gauge market sentiment. Below I will provide a high-level summary of the industry analysts’ expectations for TISI.

Check out our latest analysis for Team

TISI is bordering on breakeven, according to the 3 Commercial Services analysts. They expect the company to post a final loss in 2019, before turning a profit of US$6.0m in 2020. Therefore, TISI is expected to breakeven roughly a few months from now. How fast will TISI have to grow each year in order to reach the breakeven point by 2020? Working backwards from analyst estimates, it turns out that they expect the company to grow 117% 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.

NYSE:TISI Past and Future Earnings, February 19th 2020
NYSE:TISI Past and Future Earnings, February 19th 2020

Given this is a high-level overview, I won’t go into details of TISI’s upcoming projects, however, 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 I would like to bring into light with TISI is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in TISI’s case is 77%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

There are key fundamentals of TISI which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at TISI, take a look at TISI’s company page on Simply Wall St. I’ve also compiled a list of key aspects you should further examine:

  1. Valuation: What is TISI 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 TISI 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 Team’s board and the CEO’s back ground.

  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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.