SeaBird Exploration Plc’s (OB:SBX): SeaBird Exploration Plc, through its subsidiaries, provides marine 2D and 3D seismic data for the oil and gas industry in Europe, Africa, the Middle East, North and South America, and the Asia Pacific. On 31 December 2019, the kr126m market-cap posted a loss of -US$23.8m for its most recent financial year. As path to profitability is the topic on SBX’s investors mind, I’ve decided to gauge market sentiment. I’ve put together a brief outline of industry analyst expectations for SBX, its year of breakeven and its implied growth rate.
View our latest analysis for SeaBird Exploration
Consensus from the 2 Energy Services analysts is SBX is on the verge of breakeven. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$16m in 2021. Therefore, SBX is expected to breakeven roughly a couple of months from now! In order to meet this breakeven date, I calculated the rate at which SBX must grow year-on-year. It turns out an average annual growth rate of 101% is expected, which is rather optimistic! If this rate turns out to be too aggressive, SBX may become profitable much later than analysts predict.
OB:SBX Past and Future Earnings, March 15th 2020
Given this is a high-level overview, I won’t go into details of SBX’s upcoming projects, though, bear in mind that by and large 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 I’d like to point out is that SBX has managed its capital judiciously, with debt making up 11% of equity. This means that SBX 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 key fundamentals of SBX which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at SBX, take a look at SBX’s company page on Simply Wall St. I’ve also compiled a list of important factors you should further examine:
- Valuation: What is SBX 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 SBX 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 SeaBird Exploration’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.
If you spot an error that warrants correction, please contact the editor at [email protected]. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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