Market Sentiment Around Loss-Making Marley Spoon AG (ASX:MMM)
With the business potentially at an important milestone, we thought we'd take a closer look at Marley Spoon AG's (ASX:MMM) future prospects. Marley Spoon AG provides subscription-based weekly meal kit services in Australia, the United States, Austria, Belgium, Denmark, Sweden, Germany, and the Netherlands. With the latest financial year loss of €46m and a trailing-twelve-month loss of €52m, the AU$61m market-cap company amplified its loss by moving further away from its breakeven target. Many investors are wondering about the rate at which Marley Spoon will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.
View our latest analysis for Marley Spoon
Consensus from 2 of the Australian Online Retail analysts is that Marley Spoon is on the verge of breakeven. They anticipate the company to incur a final loss in 2024, before generating positive profits of €7.8m in 2025. Therefore, the company is expected to breakeven roughly 2 years from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 69%, 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 Marley Spoon's upcoming projects, however, bear in mind that by and large 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. Marley Spoon currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. Oftentimes, losses exist only on paper but other times, it can be a red flag.
Next Steps:
This article is not intended to be a comprehensive analysis on Marley Spoon, so if you are interested in understanding the company at a deeper level, take a look at Marley Spoon's company page on Simply Wall St. We've also compiled a list of key factors you should look at:
Valuation: What is Marley Spoon 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 Marley Spoon 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 Marley Spoon’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.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here
