Yahoo Finance Breakeven Is Near for Afentra plc (LON:AET)
We feel now is a pretty good time to analyse Afentra plc's (LON:AET) business as it appears the company may be on the cusp of a considerable accomplishment. Afentra PLC, together with its subsidiaries, operates as an upstream oil and gas company primarily in Africa. With the latest financial year loss of US$5.0m and a trailing-twelve-month loss of US$5.5m, the UK£55m market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on Afentra'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 Afentra
According to the 2 industry analysts covering Afentra, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$12m in 2023. So, the company is predicted to breakeven approximately 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 37% year-on-year, on average, which signals high confidence from analysts. 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 Afentra's upcoming projects, but, keep in mind that typically an energy business has lumpy cash flows which are contingent on the natural resource and stage at which the company is operating. So, 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 Afentra has no debt on its balance sheet, which is quite unusual for a cash-burning oil and gas company, which usually has a high level of debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
Next Steps:
This article is not intended to be a comprehensive analysis on Afentra, so if you are interested in understanding the company at a deeper level, take a look at Afentra's company page on Simply Wall St. We've also compiled a list of important aspects you should look at:
Valuation: What is Afentra 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 Afentra 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 Afentra’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.
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.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here
