Yahoo Finance Amer Sports, Inc. (NYSE:AS) On The Verge Of Breaking Even
Amer Sports, Inc. (NYSE:AS) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Amer Sports, Inc. designs, manufactures, markets, distributes, and sells sports equipment, apparel, footwear, and accessories in Europe, the Middle East, Africa, the Americas, China, and the Asia Pacific. The company’s loss has recently broadened since it announced a US$209m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$223m, moving it further away from breakeven. The most pressing concern for investors is Amer Sports' path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.
Check out our latest analysis for Amer Sports
Consensus from 16 of the American Luxury analysts is that Amer Sports is on the verge of breakeven. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$177m in 2024. The company is therefore projected to breakeven around a year from now or less! How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 51% 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 Amer Sports' upcoming projects, however, bear in mind that generally 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. Amer Sports currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Amer Sports' case is 50%. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.
Next Steps:
There are too many aspects of Amer Sports to cover in one brief article, but the key fundamentals for the company can all be found in one place – Amer Sports' company page on Simply Wall St. We've also compiled a list of relevant aspects you should look at:
Valuation: What is Amer Sports 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 Amer Sports 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 Amer Sports’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.
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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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
