The Motley Fool

The Superloop share price just tanked on a giant profit downgrade

The Superloop Ltd (ASX: SLC) share price is down 13% or 20 cents to $1.34 this morning after the Australia and South East Asia-focused fibre-optic internet infrastructure business handed investors a whopping downgrade to its full year EBITDA guidance.

For FY 2019 Superloop is now guiding for full year EBITDA to come in between $7 million to $8 million, compared to prior guidance for EBITDA between $13 million to $18 million. 

The company blamed the downgrade on it not completing a single “commercial agreement” before June 30 2019 and flagged that negotiations are continuing with the potential client and if a deal is signed it will be reflected in future earnings.

As such whether or not this significant deal is signed is an unknown for investors with the uncertainty and additional disappointment around the downgrade likely to weigh on the share price. 

The company also noted that despite the revised guidance it remains within its debt covenants to suggest the balance sheet is now under increasing pressure after it only recently raised $30.9 million at $1.25 per share.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

*Returns as of June 30th

Tom Richardson has no position in any of the stocks mentioned.

You can find Tom on Twitter @tommyr345

The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of SUPERLOOP FPO. The Motley Fool Australia has recommended SUPERLOOP FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Related Articles...

Latest posts by Tom Richardson (see all)