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Inspirato Incorporated (NASDAQ:ISPO): When Will It Breakeven?

We feel now is a pretty good time to analyse Inspirato Incorporated's (NASDAQ:ISPO) business as it appears the company may be on the cusp of a considerable accomplishment. Inspirato Incorporated operates as a subscription-based luxury travel company. The US$1.1b market-cap company announced a latest loss of US$22m on 31 December 2021 for its most recent financial year result. As path to profitability is the topic on Inspirato'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 Inspirato

Inspirato is bordering on breakeven, according to the 3 American Hospitality analysts. They expect the company to post a final loss in 2023, before turning a profit of US$5.5m in 2024. The company is therefore projected to breakeven around 2 years 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 53% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

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

We're not going to go through company-specific developments for Inspirato given that this is a high-level summary, however, bear 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. Inspirato 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 Inspirato to cover in one brief article, but the key fundamentals for the company can all be found in one place – Inspirato's company page on Simply Wall St. We've also put together a list of essential factors you should further research:

  1. Valuation: What is Inspirato 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 Inspirato 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 Inspirato’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.

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.