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Breakeven On The Horizon For Vasta Platform Limited (NASDAQ:VSTA)

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Vasta Platform Limited (NASDAQ:VSTA) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Vasta Platform Limited, an education company, provides educational and digital solutions to private schools operating in the K-12 educational sector in Brazil. With the latest financial year loss of R$46m and a trailing-twelve-month loss of R$79m, the US$746m market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on Vasta Platform's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for Vasta Platform

Vasta Platform is bordering on breakeven, according to the 6 American Consumer Services analysts. They anticipate the company to incur a final loss in 2021, before generating positive profits of R$168m in 2022. So, the company is predicted to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 102% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
earnings-per-share-growth

Underlying developments driving Vasta Platform's growth isn’t the focus of this broad overview, though, take into account that generally 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 prudently, with debt making up 17% 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 key fundamentals of Vasta Platform 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 Vasta Platform, take a look at Vasta Platform's company page on Simply Wall St. We've also compiled a list of key aspects you should look at:

  1. Valuation: What is Vasta Platform 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 Vasta Platform 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 Vasta Platform’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.

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. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.