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We feel now is a pretty good time to analyse AUTO1 Group SE's (ETR:AG1) business as it appears the company may be on the cusp of a considerable accomplishment. AUTO1 Group SE operates a digital automotive platform for buying and selling used cars online in Europe. With the latest financial year loss of €116m and a trailing-twelve-month loss of €41m, the €2.0b market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which AUTO1 Group will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.
View our latest analysis for AUTO1 Group
According to the 11 industry analysts covering AUTO1 Group, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2024, before generating positive profits of €9.3m in 2025. The company is therefore projected to breakeven just over a year from now. 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 120%, 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 AUTO1 Group's growth isn’t the focus of this broad overview, 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.
One thing we would like to bring into light with AUTO1 Group is its debt-to-equity ratio of 140%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. Note that a higher debt obligation increases the risk around investing in the loss-making company.
Next Steps:
There are too many aspects of AUTO1 Group to cover in one brief article, but the key fundamentals for the company can all be found in one place – AUTO1 Group's company page on Simply Wall St. We've also compiled a list of pertinent factors you should look at:
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Valuation: What is AUTO1 Group 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 AUTO1 Group is currently mispriced by the market.
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Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on AUTO1 Group’s board and the CEO’s background.
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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.