We feel now is a pretty good time to analyse SIGNA Sports United N.V.'s (NYSE:SSU) business as it appears the company may be on the cusp of a considerable accomplishment. SIGNA Sports United N.V. operates online sports web shops in the European Union, Switzerland, Norway, the United Kingdom, and the United States. The US$2.0b market-cap company posted a loss in its most recent financial year of €46m and a latest trailing-twelve-month loss of €235m leading to an even wider gap between loss and breakeven. As path to profitability is the topic on SIGNA Sports United'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.
SIGNA Sports United is bordering on breakeven, according to the 2 American Online Retail analysts. They anticipate the company to incur a final loss in 2023, before generating positive profits of €30m in 2024. The company is therefore projected to breakeven around 2 years 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 84% is expected, 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.
Given this is a high-level overview, we won’t go into details of SIGNA Sports United's upcoming projects, but, bear in mind that typically 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 11% 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.
This article is not intended to be a comprehensive analysis on SIGNA Sports United, so if you are interested in understanding the company at a deeper level, take a look at SIGNA Sports United's company page on Simply Wall St. We've also compiled a list of pertinent aspects you should look at:
Valuation: What is SIGNA Sports United 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 SIGNA Sports United 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 SIGNA Sports United’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.
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