With the business potentially at an important milestone, we thought we'd take a closer look at CommScope Holding Company, Inc.'s (NASDAQ:COMM) future prospects. CommScope Holding Company, Inc. provides infrastructure solutions for communications and entertainment networks. The US$1.9b market-cap company’s loss lessened since it announced a US$520m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$470m, as it approaches breakeven. As path to profitability is the topic on CommScope Holding Company's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.
According to the 10 industry analysts covering CommScope Holding Company, the consensus is that breakeven is near. They expect the company to post a final loss in 2023, before turning a profit of US$275m in 2024. 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 102% 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.
We're not going to go through company-specific developments for CommScope Holding Company given that this is a high-level summary, but, take into account that generally 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 CommScope Holding Company is its debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk around investing in the loss-making company.
There are key fundamentals of CommScope Holding Company 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 CommScope Holding Company, take a look at CommScope Holding Company's company page on Simply Wall St. We've also put together a list of pertinent aspects you should look at:
Valuation: What is CommScope Holding Company 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 CommScope Holding Company 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 CommScope Holding Company’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.
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