We feel now is a pretty good time to analyse Converge Technology Solutions Corp.’s (CVE:CTS) business as it appears the company may be on the cusp of a considerable accomplishment. Converge Technology Solutions Corp., through its subsidiaries, distributes storage devices and systems, computer products, software, and peripherals. The CA$160m market-cap company posted a loss in its most recent financial year of CA$10.8m and a latest trailing-twelve-month loss of CA$11.4m leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which Converge Technology Solutions 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.
View our latest analysis for Converge Technology Solutions
According to the 5 industry analysts covering Converge Technology Solutions, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2019, before generating positive profits of CA$5.4m in 2020. The company is therefore projected to breakeven around a year from now or less! We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 55% is expected, 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 Converge Technology Solutions given that this is a high-level summary, but, bear in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before we wrap up, there’s one issue worth mentioning. Converge Technology Solutions currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. These losses tend to occur only on paper, however, in other cases it can be forewarning.
There are key fundamentals of Converge Technology Solutions 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 Converge Technology Solutions, take a look at Converge Technology Solutions’ company page on Simply Wall St. We’ve also put together a list of important factors you should look at:
- Valuation: What is Converge Technology Solutions 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 Converge Technology Solutions 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 Converge Technology Solutions’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.
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. 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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