Helloworld Travel Limited (ASX:HLO) Is About To Turn The Corner
We feel now is a pretty good time to analyse Helloworld Travel Limited's (ASX:HLO) business as it appears the company may be on the cusp of a considerable accomplishment. Helloworld Travel Limited operates as a travel distribution company in Australia, New Zealand, and internationally. The AU$319m market-cap company announced a latest loss of AU$28m on 30 June 2022 for its most recent financial year result. As path to profitability is the topic on Helloworld Travel's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
View our latest analysis for Helloworld Travel
Helloworld Travel is bordering on breakeven, according to the 4 Australian Hospitality analysts. They expect the company to post a final loss in 2022, before turning a profit of AU$1.2m in 2023. So, the company is predicted to breakeven approximately a year from now or less! At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 98%, 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 Helloworld Travel's upcoming projects, though, bear in mind 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 Helloworld Travel has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which typically has high debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
Next Steps:
This article is not intended to be a comprehensive analysis on Helloworld Travel, so if you are interested in understanding the company at a deeper level, take a look at Helloworld Travel's company page on Simply Wall St. We've also compiled a list of relevant aspects you should look at:
Valuation: What is Helloworld Travel 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 Helloworld Travel 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 Helloworld Travel’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.
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