Gannett Co., Inc.'s (NYSE:GCI) Path To Profitability
Gannett Co., Inc. (NYSE:GCI) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Gannett Co., Inc. operates as a media and marketing solutions company in the United States. On 31 December 2023, the US$289m market-cap company posted a loss of US$28m for its most recent financial year. As path to profitability is the topic on Gannett'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.
View our latest analysis for Gannett
Consensus from 3 of the American Media analysts is that Gannett is on the verge of breakeven. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$58m in 2025. Therefore, the company is expected to breakeven just over a year from today. 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 84% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
We're not going to go through company-specific developments for Gannett given that this is a high-level summary, however, keep in mind that generally 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. Gannett currently has a 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 Gannett 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 Gannett, take a look at Gannett's company page on Simply Wall St. We've also compiled a list of key aspects you should look at:
Valuation: What is Gannett 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 Gannett 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 Gannett’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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
