Marley Spoon AG (ASX:MMM) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Marley Spoon AG provides subscription-based weekly meal kit services in Australia, the United States, Austria, Belgium, Denmark, Sweden, Germany, and the Netherlands. The company’s loss has recently broadened since it announced a €35m loss in the full financial year, compared to the latest trailing-twelve-month loss of €80m, moving it further away from breakeven. As path to profitability is the topic on Marley Spoon'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.
According to some industry analysts covering Marley Spoon, breakeven is near. They expect the company to post a final loss in 2021, before turning a profit of €3.6m in 2022. So, the company is predicted to breakeven just over a year 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 84%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Underlying developments driving Marley Spoon's growth isn’t the focus of this broad overview, but, 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. Marley Spoon 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.
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 pertinent aspects you should further examine:
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.
This article by Simply Wall St is general in nature. 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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