Yahoo Finance Aston Martin Lagonda Global Holdings plc's (LON:AML) Profit Outlook
With the business potentially at an important milestone, we thought we'd take a closer look at Aston Martin Lagonda Global Holdings plc's (LON:AML) future prospects. Aston Martin Lagonda Global Holdings plc designs, develops, manufactures, markets, and sells luxury sports cars under the Aston Martin and Lagonda brand names worldwide. The UK£1.2b market-cap company posted a loss in its most recent financial year of UK£192m and a latest trailing-twelve-month loss of UK£549m leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which Aston Martin Lagonda Global Holdings will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
Check out our latest analysis for Aston Martin Lagonda Global Holdings
Consensus from 9 of the British Auto analysts is that Aston Martin Lagonda Global Holdings is on the verge of breakeven. They anticipate the company to incur a final loss in 2024, before generating positive profits of UK£19m in 2025. So, the company is predicted to breakeven approximately 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 81% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
We're not going to go through company-specific developments for Aston Martin Lagonda Global Holdings given that this is a high-level summary, however, keep in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before we wrap up, there’s one issue worth mentioning. Aston Martin Lagonda Global Holdings currently has a debt-to-equity ratio of 192%. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.
Next Steps:
There are key fundamentals of Aston Martin Lagonda Global Holdings 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 Aston Martin Lagonda Global Holdings, take a look at Aston Martin Lagonda Global Holdings' company page on Simply Wall St. We've also compiled a list of key factors you should look at:
Valuation: What is Aston Martin Lagonda Global Holdings 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 Aston Martin Lagonda Global Holdings 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 Aston Martin Lagonda Global Holdings’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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