Secoo Holding Limited (NASDAQ:SECO): When Will It Breakeven?
Secoo Holding Limited’s (NASDAQ:SECO): Secoo Holding Limited, through its subsidiaries, operates an integrated online and offline shopping platform in the People’s Republic of China and internationally. On 31 December 2017, the US$499.53M market-cap posted a loss of -CN¥69.42M for its most recent financial year. The most pressing concern for investors is SECO’s path to profitability – when will it breakeven? In this article, I will touch on the expectations for SECO’s growth and when analysts expect the company to become profitable.
View our latest analysis for Secoo Holding
Expectation from analysts is SECO is on the verge of breakeven. They anticipate the company to incur a final loss in 2017, before generating positive profits of CN¥290.30M in 2018. So, SECO is predicted to breakeven approximately a couple of months from now! How fast will SECO have to grow each year in order to reach the breakeven point by 2018? Working backwards from analyst estimates, it turns out that they expect the company to grow 60.76% year-on-year, on average, 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 SECO’s growth isn’t the focus of this broad overview, but, keep in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing I’d like to point out is that SECO has managed its capital prudently, with debt making up 23.47% of equity. This means that SECO has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
Next Steps:
There are key fundamentals of SECO which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at SECO, take a look at SECO’s company page on Simply Wall St. I’ve also put together a list of relevant factors you should look at:
Historical Track Record: What has SECO’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 Secoo Holding’s board and the CEO’s back ground.
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.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
