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Ascential plc (LON:ASCL): When Will It Breakeven?

Ascential plc (LON:ASCL) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Ascential plc provides specialist information, analytics, and e-commerce optimization platforms in the United Kingdom, rest of Europe, the United States, Canada, the Asia Pacific, the Middle East, Africa, and Latin America. The company’s loss has recently broadened since it announced a UK£39m loss in the full financial year, compared to the latest trailing-twelve-month loss of UK£65m, moving it further away from breakeven. As path to profitability is the topic on Ascential'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.

View our latest analysis for Ascential

According to the 10 industry analysts covering Ascential, the consensus is that breakeven is near. They expect the company to post a final loss in 2022, before turning a profit of UK£31m in 2023. 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 95% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
earnings-per-share-growth

We're not going to go through company-specific developments for Ascential given that this is a high-level summary, 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’d like to point out is that The company has managed its capital judiciously, with debt making up 32% 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 Ascential to cover in one brief article, but the key fundamentals for the company can all be found in one place – Ascential's company page on Simply Wall St. We've also put together a list of pertinent aspects you should look at:

  1. Valuation: What is Ascential 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 Ascential 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 Ascential’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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

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