With the business potentially at an important milestone, we thought we'd take a closer look at Unisys Corporation's (NYSE:UIS) future prospects. Unisys Corporation, together with its subsidiaries, operates as an information technology services company worldwide. With the latest financial year loss of US$449m and a trailing-twelve-month loss of US$348m, the US$840m market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which Unisys will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.
Consensus from 4 of the American IT analysts is that Unisys is on the verge of breakeven. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$8.4m in 2022. The company is therefore projected to breakeven around 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 113% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
We're not going to go through company-specific developments for Unisys given that this is a high-level summary, however, keep in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing we would like to bring into light with Unisys is it currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. These losses tend to occur only on paper, however, in other cases it can be forewarning.
There are key fundamentals of Unisys 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 Unisys, take a look at Unisys' company page on Simply Wall St. We've also put together a list of relevant factors you should look at:
Valuation: What is Unisys 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 Unisys 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 Unisys’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.