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Top Shelf International Holdings Ltd (ASX:TSI): Is Breakeven Near?

Top Shelf International Holdings Ltd (ASX:TSI) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Top Shelf International Holdings Ltd engages in the production and marketing of NED Australian Whisky and Grainshaker Hand Made Vodka beverages in Australia. On 30 June 2021, the AU$107m market-cap company posted a loss of AU$11m for its most recent financial year. The most pressing concern for investors is Top Shelf International Holdings' path to profitability – when will it breakeven? 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 Top Shelf International Holdings

According to the 4 industry analysts covering Top Shelf International Holdings, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2023, before generating positive profits of AU$860k in 2024. Therefore, the company is expected to breakeven roughly 3 years from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 65%, which signals high confidence from analysts. 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 Top Shelf International Holdings' 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.

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Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 34% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of Top Shelf International Holdings to cover in one brief article, but the key fundamentals for the company can all be found in one place – Top Shelf International Holdings' company page on Simply Wall St. We've also compiled a list of key factors you should further research:

  1. Valuation: What is Top Shelf International Holdings 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 Top Shelf International Holdings 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 Top Shelf International Holdings’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.

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.