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Genco Shipping & Trading Limited (NYSE:GNK) Could Be Less Than A Year Away From Profitability

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Genco Shipping & Trading Limited (NYSE:GNK) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Genco Shipping & Trading Limited, together with its subsidiaries, engages in the ocean transportation of dry bulk cargoes worldwide. With the latest financial year loss of US$226m and a trailing-twelve-month loss of US$53m, the US$861m market-cap company alleviated its loss by moving closer towards its target of breakeven. As path to profitability is the topic on Genco Shipping & Trading's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

Check out our latest analysis for Genco Shipping & Trading

Consensus from 7 of the American Shipping analysts is that Genco Shipping & Trading is on the verge of breakeven. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$142m in 2021. So, the company is predicted to breakeven approximately a year from now or less! We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 22% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
earnings-per-share-growth

Underlying developments driving Genco Shipping & Trading's growth isn’t the focus of this broad overview, though, keep in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we would like to bring into light with Genco Shipping & Trading is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Genco Shipping & Trading's case is 46%. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Genco Shipping & Trading which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Genco Shipping & Trading, take a look at Genco Shipping & Trading's company page on Simply Wall St. We've also put together a list of relevant aspects you should further examine:

  1. Valuation: What is Genco Shipping & Trading 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 Genco Shipping & Trading 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 Genco Shipping & Trading’s board and the CEO’s background.

  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.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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