Top Shelf International Holdings Ltd (ASX:TSI) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Top Shelf International Holdings Ltd engages in the production, marketing, and selling of NED Australian Whisky and Grainshaker Hand Made Vodka spirit products in Australia. On 30 June 2023, the AU$44m market-cap company posted a loss of AU$48m for its most recent financial year. As path to profitability is the topic on Top Shelf International Holdings' investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Check out our latest analysis for Top Shelf International Holdings

According to the 2 industry analysts covering Top Shelf International Holdings, the consensus is that breakeven is near. They expect the company to post a final loss in 2025, before turning a profit of AU$294k in 2026. The company is therefore projected to breakeven around 3 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 87% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of Top Shelf International Holdings' upcoming projects, but, keep in mind that by and large 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 Top Shelf International Holdings is its debt-to-equity ratio of 145%. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

There are key fundamentals of Top Shelf International Holdings 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 Top Shelf International Holdings, take a look at Top Shelf International Holdings' company page on Simply Wall St. We've also put together a list of important factors you should further examine:

1. Historical Track Record: What has Top Shelf International Holdings' 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.

2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Top Shelf International Holdings' 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.

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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.