Yahoo Finance When Can We Expect A Profit From Iofina plc (LON:IOF)?
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Iofina plc’s (LON:IOF): Iofina plc engages in the production of iodine, water, and natural gas in the United States and the United Kingdom. With the latest financial year loss of -US$9.7m and a trailing-twelve month of -US$8.5m, the UK£22m market-cap alleviates its loss by moving closer towards its target of breakeven. The most pressing concern for investors is IOF’s path to profitability – when will it breakeven? I’ve put together a brief outline of industry analyst expectations for IOF, its year of breakeven and its implied growth rate.
See our latest analysis for Iofina
Expectation from Chemicals analysts is IOF is on the verge of breakeven. They expect the company to post a final loss in 2018, before turning a profit of US$1.0m in 2019. IOF is therefore projected to breakeven around a few months from now. How fast will IOF have to grow each year in order to reach the breakeven point by 2019? Working backwards from analyst estimates, it turns out that they expect the company to grow 117% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, IOF may become profitable much later than analysts predict.
Underlying developments driving IOF’s growth isn’t the focus of this broad overview, though, keep in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing I would like to bring into light with IOF is its debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, which in IOF’s case, it has significantly overshot. Note that a higher debt obligation increases the risk in investing in the loss-making company.
Next Steps:
There are too many aspects of IOF to cover in one brief article, but the key fundamentals for the company can all be found in one place – IOF’s company page on Simply Wall St. I’ve also compiled a list of essential aspects you should look at:
Valuation: What is IOF 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 IOF 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 Iofina’s board and the CEO’s back ground.
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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
