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Auction Technology Group plc (LON:ATG) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Auction Technology Group plc operates marketplaces and a proprietary auction platform in the United Kingdom, the United States, Austria, Germany, and Switzerland. The UK£985m market-cap company announced a latest loss of UK£16m on 30 September 2020 for its most recent financial year result. Many investors are wondering about the rate at which Auction Technology Group will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
Consensus from 2 of the British Online Retail analysts is that Auction Technology Group is on the verge of breakeven. They expect the company to post a final loss in 2021, before turning a profit of UK£9.7m in 2022. Therefore, the company is expected to breakeven just over a year from now. 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 89% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Given this is a high-level overview, we won’t go into details of Auction Technology Group's upcoming projects, however, keep in mind 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 issue worth mentioning. Auction Technology Group currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. These losses tend to occur only on paper, however, in other cases it can be forewarning.
There are key fundamentals of Auction Technology Group 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 Auction Technology Group, take a look at Auction Technology Group's company page on Simply Wall St. We've also put together a list of relevant aspects you should further examine:
Valuation: What is Auction Technology 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 Auction Technology Group 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 Auction Technology Group’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.
This article by Simply Wall St is general in nature. 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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