Breakeven On The Horizon For Wag! Group Co. (NASDAQ:PET)
Wag! Group Co. (NASDAQ:PET) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Wag! Group Co. develops and supports a proprietary marketplace technology platform available as a website and mobile app that enables independent pet caregivers to connect with pet parents. The US$80m market-cap company posted a loss in its most recent financial year of US$39m and a latest trailing-twelve-month loss of US$4.0m shrinking the gap between loss and breakeven. Many investors are wondering about the rate at which Wag! Group will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.
Check out our latest analysis for Wag! Group
Wag! Group is bordering on breakeven, according to the 5 American Consumer Services analysts. They expect the company to post a final loss in 2024, before turning a profit of US$5.8m in 2025. 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 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 43% 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.
Given this is a high-level overview, we won’t go into details of Wag! Group's upcoming projects, but, keep in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing we would like to bring into light with Wag! Group is its debt-to-equity ratio of over 2x. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.
Next Steps:
There are key fundamentals of Wag! 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 Wag! Group, take a look at Wag! Group's company page on Simply Wall St. We've also compiled a list of key aspects you should further research:
Valuation: What is Wag! Group 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 Wag! Group 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 Wag! 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.
