Tuniu Corporation (NASDAQ:TOUR) Has Found A Path To Profitability
We feel now is a pretty good time to analyse Tuniu Corporation's (NASDAQ:TOUR) business as it appears the company may be on the cusp of a considerable accomplishment. Tuniu Corporation operates as an online leisure travel company in China. The US$103m market-cap company announced a latest loss of CN¥99m on 31 December 2023 for its most recent financial year result. The most pressing concern for investors is Tuniu's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.
See our latest analysis for Tuniu
According to some industry analysts covering Tuniu, breakeven is near. They expect the company to post a final loss in 2023, before turning a profit of CN¥67m in 2024. Therefore, the company is expected to breakeven roughly a year from now or less! How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 113% year-on-year, on average, 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 Tuniu's upcoming projects, but, take into account that by and large 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 aspect worth mentioning. The company has managed its capital prudently, with debt making up 1.8% of equity. This means that it 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:
This article is not intended to be a comprehensive analysis on Tuniu, so if you are interested in understanding the company at a deeper level, take a look at Tuniu'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 Tuniu'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 Tuniu'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.
