Yahoo Finance When Can We Expect A Profit From Full Truck Alliance Co. Ltd. (NYSE:YMM)?
Full Truck Alliance Co. Ltd. (NYSE:YMM) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Full Truck Alliance Co. Ltd., together with its subsidiaries, operates a digital freight platform that connects shippers with truckers to facilitate shipments across distance ranges, cargo weights, and types in the People’s Republic of China. The US$7.9b market-cap company announced a latest loss of CN¥4.2b on 31 December 2021 for its most recent financial year result. Many investors are wondering about the rate at which Full Truck Alliance will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
View our latest analysis for Full Truck Alliance
Consensus from 4 of the American Transportation analysts is that Full Truck Alliance is on the verge of breakeven. They anticipate the company to incur a final loss in 2022, before generating positive profits of CN¥1.9b in 2023. Therefore, the company is expected to breakeven just over a year from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 102%, 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 Full Truck Alliance's growth isn’t the focus of this broad overview, but, bear 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 0.03% 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 Full Truck Alliance to cover in one brief article, but the key fundamentals for the company can all be found in one place – Full Truck Alliance's company page on Simply Wall St. We've also put together a list of pertinent factors you should further examine:
Valuation: What is Full Truck Alliance 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 Full Truck Alliance 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 Full Truck Alliance’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.
