Loss-Making Baozun Inc. (NASDAQ:BZUN) Expected To Breakeven In The Medium-Term

We feel now is a pretty good time to analyse Baozun Inc.'s (NASDAQ:BZUN) business as it appears the company may be on the cusp of a considerable accomplishment. Baozun Inc., through its subsidiaries, provides e-commerce solutions to brand partners in the People’s Republic of China. On 31 December 2023, the US$174m market-cap company posted a loss of CN¥278m for its most recent financial year. As path to profitability is the topic on Baozun's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for Baozun

Baozun is bordering on breakeven, according to the 9 American Multiline Retail analysts. They anticipate the company to incur a final loss in 2024, before generating positive profits of CN¥197m in 2025. So, the company is predicted to breakeven just over a year from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 94% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

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We're not going to go through company-specific developments for Baozun given that this is a high-level summary, though, take into account 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 aspect worth mentioning. The company has managed its capital judiciously, with debt making up 19% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of Baozun to cover in one brief article, but the key fundamentals for the company can all be found in one place – Baozun's company page on Simply Wall St. We've also compiled a list of pertinent factors you should further research:

1. Valuation: What is Baozun 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 Baozun 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 Baozun’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.

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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.