MotorK plc's (AMS:MTRK) Shift From Loss To Profit

With the business potentially at an important milestone, we thought we'd take a closer look at MotorK plc's (AMS:MTRK) future prospects. MotorK plc, together with its subsidiaries, provides software-as-a-service for the automotive retail industry in Italy, Spain, France, and Germany. The €111m market-cap company posted a loss in its most recent financial year of €14m and a latest trailing-twelve-month loss of €15m leading to an even wider gap between loss and breakeven. As path to profitability is the topic on MotorK's investors mind, we've decided to gauge market sentiment. 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 MotorK

According to the 3 industry analysts covering MotorK, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2023, before generating positive profits of €2.0m in 2024. Therefore, the company is expected to breakeven just over a year from today. 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 112%, 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.

earnings-per-share-growth

Underlying developments driving MotorK's growth isn’t the focus of this broad overview, but, keep in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 13% 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 MotorK to cover in one brief article, but the key fundamentals for the company can all be found in one place – MotorK's company page on Simply Wall St. We've also put together a list of essential factors you should further research:

1. Valuation: What is MotorK 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 MotorK 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 MotorK’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.