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When Can We Expect A Profit From MoneyGram International, Inc. (NASDAQ:MGI)?

MoneyGram International, Inc. (NASDAQ:MGI) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. MoneyGram International, Inc., together with its subsidiaries, provides cross-border peer-to-peer payments and money transfer services in the United States and internationally. The US$952m market-cap company posted a loss in its most recent financial year of US$7.9m and a latest trailing-twelve-month loss of US$1.8m shrinking the gap between loss and breakeven. As path to profitability is the topic on MoneyGram International's investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

View our latest analysis for MoneyGram International

According to the 5 industry analysts covering MoneyGram International, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$3.4m in 2022. Therefore, the company is expected to breakeven just over a year from now. 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 114% 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.

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

We're not going to go through company-specific developments for MoneyGram International given that this is a high-level summary, however, take into account that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one issue worth mentioning. MoneyGram International currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. These losses tend to occur only on paper, however, in other cases it can be forewarning.

Next Steps:

There are too many aspects of MoneyGram International to cover in one brief article, but the key fundamentals for the company can all be found in one place – MoneyGram International's company page on Simply Wall St. We've also compiled a list of essential aspects you should further examine:

  1. Valuation: What is MoneyGram International 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 MoneyGram International 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 MoneyGram International’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.

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