Xcel Brands, Inc.'s (NASDAQ:XELB) Shift From Loss To Profit
We feel now is a pretty good time to analyse Xcel Brands, Inc.'s (NASDAQ:XELB) business as it appears the company may be on the cusp of a considerable accomplishment. Xcel Brands, Inc., together with its subsidiaries, operates as a media and consumer products company in the United States. The company’s loss has recently broadened since it announced a US$4.0m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$19m, moving it further away from breakeven. The most pressing concern for investors is Xcel Brands' path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
See our latest analysis for Xcel Brands
According to some industry analysts covering Xcel Brands, breakeven is near. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$3.3m in 2025. The company is therefore projected to breakeven around 2 years from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 98% is expected, which signals high confidence from analysts. 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 Xcel Brands' upcoming projects, but, bear in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing we’d like to point out is that Xcel Brands has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which usually has a high level of debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
Next Steps:
There are key fundamentals of Xcel Brands 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 Xcel Brands, take a look at Xcel Brands' company page on Simply Wall St. We've also compiled a list of relevant factors you should look at:
Valuation: What is Xcel Brands 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 Xcel Brands 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 Xcel Brands’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.
