Breakeven On The Horizon For Plenti Group Limited (ASX:PLT)
We feel now is a pretty good time to analyse Plenti Group Limited's (ASX:PLT) business as it appears the company may be on the cusp of a considerable accomplishment. Plenti Group Limited engages in the fintech lending business in Australia. On 31 March 2023, the AU$66m market-cap company posted a loss of AU$14m for its most recent financial year. The most pressing concern for investors is Plenti Group's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
Check out our latest analysis for Plenti Group
According to the 2 industry analysts covering Plenti Group, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2025, before generating positive profits of AU$9.7m in 2026. So, the company is predicted to breakeven approximately 3 years 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 58%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, we won’t go into details of Plenti Group's upcoming projects, though, take into account that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before we wrap up, there’s one issue worth mentioning. Plenti Group currently has a debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. Note that a higher debt obligation increases the risk in investing in the loss-making company.
Next Steps:
There are key fundamentals of Plenti Group which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Plenti Group, take a look at Plenti Group's company page on Simply Wall St. We've also compiled a list of key aspects you should further research:
Historical Track Record: What has Plenti Group's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Plenti Group'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.
