Directa Plus Plc's (LON:DCTA) Profit Outlook

With the business potentially at an important milestone, we thought we'd take a closer look at Directa Plus Plc's (LON:DCTA) future prospects. Directa Plus Plc manufactures and sells graphene-based products for industrial and commercial applications in Italy and internationally. The UK£11m market-cap company announced a latest loss of €3.9m on 31 December 2023 for its most recent financial year result. The most pressing concern for investors is Directa Plus' path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

View our latest analysis for Directa Plus

Directa Plus is bordering on breakeven, according to the 2 British Chemicals analysts. They expect the company to post a final loss in 2024, before turning a profit of €2.0m in 2025. Therefore, the company is expected to breakeven just over a year 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 103% 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.

earnings-per-share-growth

Given this is a high-level overview, we won’t go into details of Directa Plus' upcoming projects, however, keep in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 35% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Directa Plus, so if you are interested in understanding the company at a deeper level, take a look at Directa Plus' company page on Simply Wall St. We've also compiled a list of essential aspects you should look at:

1. Historical Track Record: What has Directa Plus' performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.

2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Directa Plus' board and the CEO’s background.

3. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com