Yahoo Finance Matra Petroleum AB (publ) (STO:MATRA): When Will It Breakeven?
Matra Petroleum AB (publ)’s (STO:MATRA): Matra Petroleum AB (publ), an independent oil and gas company, engages in the exploration and production of oil and gas in the United States. With the latest financial year loss of -US$7m and a trailing-twelve month of -US$9m, the kr187m market-cap amplifies its loss by moving further away from its breakeven target. The most pressing concern for investors is MATRA’s path to profitability – when will it breakeven? Below I will provide a high-level summary of the industry analysts’ expectations for MATRA.
View our latest analysis for Matra Petroleum
Expectation from Oil and Gas analysts is MATRA is on the verge of breakeven. They expect the company to post a final loss in 2019, before turning a profit of US$3m in 2020. MATRA is therefore projected to breakeven around a few months from now. How fast will MATRA have to grow each year in order to reach the breakeven point by 2020? Working backwards from analyst estimates, it turns out that they expect the company to grow 96% year-on-year, on average, which is extremely buoyant. 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, I won’t go into details of MATRA’s upcoming projects, however, bear in mind that typically oil and gas companies, depending on the stage of operation and resource produced, have irregular periods of cash flow. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before I wrap up, there’s one issue worth mentioning. MATRA currently has a debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, which in MATRA’s case, it has significantly overshot. Note that a higher debt obligation increases the risk around investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on MATRA, so if you are interested in understanding the company at a deeper level, take a look at MATRA’s company page on Simply Wall St. I’ve also put together a list of relevant aspects you should further examine:
Historical Track Record: What has MATRA’s performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Matra Petroleum’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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
