Analysts Expect Breakeven For Stockmann Oyj Abp (HEL:STCBV)
Stockmann Oyj Abp's (HEL:STCBV): Stockmann Oyj Abp engages in the retailing activities in Finland and internationally. With the latest financial year loss of -€49.1m and a trailing-twelve month of -€64.1m, the €170m market-cap amplifies its loss by moving further away from its breakeven target. As path to profitability is the topic on STCBV’s investors mind, I’ve decided to gauge market sentiment. In this article, I will touch on the expectations for STCBV’s growth and when analysts expect the company to become profitable.
Check out our latest analysis for Stockmann Oyj Abp
STCBV is bordering on breakeven, according to Multiline Retail analysts. They expect the company to post a final loss in 2020, before turning a profit of €10m in 2021. So, STCBV is predicted to breakeven approximately 2 years from now. In order to meet this breakeven date, I calculated the rate at which STCBV must grow year-on-year. It turns out an average annual growth rate of 103% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
I’m not going to go through company-specific developments for STCBV 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.
One thing I would like to bring into light with STCBV is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in STCBV’s case is 57%. Note that a higher debt obligation increases the risk in investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on STCBV, so if you are interested in understanding the company at a deeper level, take a look at STCBV’s company page on Simply Wall St. I’ve also put together a list of essential factors you should look at:
Valuation: What is STCBV 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 STCBV 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 Stockmann Oyj Abp’s board and the CEO’s back ground.
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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If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
