Breakeven Is Near for International Game Technology PLC (NYSE:IGT)

We feel now is a pretty good time to analyse International Game Technology PLC's (NYSE:IGT) business as it appears the company may be on the cusp of a considerable accomplishment. International Game Technology PLC operates and provides gaming technology products and services worldwide. The US$4.8b market-cap company posted a loss in its most recent financial year of US$939m and a latest trailing-twelve-month loss of US$598m shrinking the gap between loss and breakeven. As path to profitability is the topic on International Game Technology's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

Check out our latest analysis for International Game Technology

International Game Technology is bordering on breakeven, according to the 8 American Hospitality analysts. They expect the company to post a final loss in 2020, before turning a profit of US$161m in 2021. 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 42% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving International Game Technology's growth isn’t the focus of this broad overview, however, bear in mind that typically 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 International Game Technology is its debt-to-equity ratio of over 2x. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

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Next Steps:

There are key fundamentals of International Game Technology 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 International Game Technology, take a look at International Game Technology's company page on Simply Wall St. We've also put together a list of relevant factors you should further examine:

1. Valuation: What is International Game Technology 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 International Game Technology is currently mispriced by the market.

2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on International Game Technology’s board and the CEO’s background.

3. 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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