Synertec Corporation Limited (ASX: SOP) Perhaps a major achievement in his business is approaching, so we would like to shed some light on the business. Synertec Corporation Limited provides technology and engineering services in Australia. The A $ 28 million market-capitalization company reported a final loss of A $ 3.4 million on June 30, 2021 for its latest result for the year. As the path to profitability is the topic of concern to Synertec investors, we decided to assess market sentiment. In this article, we’ll discuss the company’s growth expectations and when analysts expect it to become profitable.
See our latest analysis for Synertec
The expectations of some Australian professional services analysts are that Synertec is on the cusp of breaking even. They expect the company to make a terminal loss in 2023, before making a profit of AU $ 300,000 in 2024. The company is therefore expected to break even in about 3 years. At what rate will the company have to grow from one year to the next to reach equilibrium on that date? Using a line of best fit, we calculated an average annual growth rate of 72%, which is pretty optimistic! If this rate turns out to be too aggressive, the company could become profitable much later than analysts predict.
We will not go over company specific developments for Synertec as this is a high level summary, however, keep in mind that overall a growth rate high is not unusual, especially when a business is in an investment period.
One thing we would like to point out is that Synertec has no debt on its balance sheet, which is quite unusual for a growing business that burns cash, which typically has a high level of debt compared to its equity. The company currently operates solely on funding from its shareholders and has no debt, reducing concerns about repayments and making it a less risky investment.
There are too many aspects of Synertec to cover in a short article, but the fundamentals of the business can all be found in one place – Synertec’s company page on Simply Wall St. We have also compiled a list of key factors that you should dig deeper to look for:
Historical review: How has Synertec performed in the past? Go deeper into the background analysis and take a look at the free visual representations of our analysis for clarity.
Management team: An experienced management team at the helm increases our confidence in the company – take a look at the members of the Synertec board of directors and the background of the CEO.
Other high performing stocks: Are there other stocks that offer better prospects with a proven track record? Check out our free list of these great stocks here.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only 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 into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.