Loss-Making Waldencast plc (NASDAQ:WALD) Set To Breakeven
We feel now is a pretty good time to analyse Waldencast plc's (NASDAQ:WALD) business as it appears the company may be on the cusp of a considerable accomplishment. Waldencast plc, a skincare company, develops, markets, and sells skin health products worldwide. The US$794m market-cap company posted a loss in its most recent financial year of US$14m and a latest trailing-twelve-month loss of US$19m leading to an even wider gap between loss and breakeven. As path to profitability is the topic on Waldencast'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 Waldencast
According to the 3 industry analysts covering Waldencast, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$6.7m in 2023. The company is therefore projected to breakeven around 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 131%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving Waldencast's growth isn’t the focus of this broad overview, though, 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. Waldencast 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. Oftentimes, losses exist only on paper but other times, it can be a red flag.
Next Steps:
There are key fundamentals of Waldencast 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 Waldencast, take a look at Waldencast's company page on Simply Wall St. We've also put together a list of important aspects you should further examine:
Historical Track Record: What has Waldencast's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Waldencast'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.
