Yahoo Movies Oil States International, Inc. (NYSE:OIS) Is About To Turn The Corner
We feel now is a pretty good time to analyse Oil States International, Inc.'s (NYSE:OIS) business as it appears the company may be on the cusp of a considerable accomplishment. Oil States International, Inc., through its subsidiaries, provides oilfield products and services for the drilling, completion, subsea, production, and infrastructure sectors of the oil and gas industry worldwide. With the latest financial year loss of US$64m and a trailing-twelve-month loss of US$32m, the US$477m market-cap company alleviated its loss by moving closer towards its target of breakeven. The most pressing concern for investors is Oil States International's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
See our latest analysis for Oil States International
According to the 4 industry analysts covering Oil States International, the consensus is that breakeven is near. They expect the company to post a final loss in 2022, before turning a profit of US$19m in 2023. Therefore, the company is expected to breakeven roughly 12 months from now or less. At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 112%, which is rather optimistic! 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 Oil States International's upcoming projects, but, bear 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 The company has managed its capital judiciously, with debt making up 23% 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 key fundamentals of Oil States International 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 Oil States International, take a look at Oil States International's company page on Simply Wall St. We've also compiled a list of important factors you should further research:
Valuation: What is Oil States International 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 Oil States International 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 Oil States International’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.
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