When Will Marley Spoon SE (ASX:MMM) Turn A Profit?
With the business potentially at an important milestone, we thought we'd take a closer look at Marley Spoon SE's (ASX:MMM) future prospects. Marley Spoon SE provides subscription-based weekly meal kit services in Australia, the United States, Austria, Belgium, Denmark, Sweden, Germany, and the Netherlands. On 31 December 2022, the AU$91m market-cap company posted a loss of €40m for its most recent financial year. As path to profitability is the topic on Marley Spoon'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.
See our latest analysis for Marley Spoon
According to some industry analysts covering Marley Spoon, breakeven is near. They anticipate the company to incur a final loss in 2024, before generating positive profits of €15m in 2025. The company is therefore projected to breakeven around 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 80%, which signals high confidence from analysts. 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, take into account 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 would like to bring into light with Marley Spoon is it 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 key fundamentals of Marley Spoon 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 Marley Spoon, take a look at Marley Spoon's company page on Simply Wall St. We've also compiled a list of relevant factors you should look at:
Historical Track Record: What has Marley Spoon'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 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.
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