Yahoo Finance When Will AUTO1 Group SE (ETR:AG1) Breakeven?
With the business potentially at an important milestone, we thought we'd take a closer look at AUTO1 Group SE's (ETR:AG1) future prospects. AUTO1 Group SE operates a digital automotive platform for buying and selling used cars online in Europe. The €1.3b market-cap company posted a loss in its most recent financial year of €246m and a latest trailing-twelve-month loss of €152m shrinking the gap between loss and breakeven. The most pressing concern for investors is AUTO1 Group's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
See our latest analysis for AUTO1 Group
According to the 10 industry analysts covering AUTO1 Group, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2024, before generating positive profits of €29m in 2025. Therefore, the company is expected to breakeven roughly 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 99% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Underlying developments driving AUTO1 Group's growth isn’t the focus of this broad overview, though, 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 AUTO1 Group is its debt-to-equity ratio of 106%. 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 in investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on AUTO1 Group, so if you are interested in understanding the company at a deeper level, take a look at AUTO1 Group's company page on Simply Wall St. We've also compiled a list of pertinent aspects you should further examine:
Valuation: What is AUTO1 Group 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 AUTO1 Group 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 AUTO1 Group’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.
