Yahoo Finance Ebiquity plc's (LON:EBQ) Path To Profitability
Ebiquity plc (LON:EBQ) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Ebiquity plc, together with its subsidiaries, provides media consultancy and investment analysis services worldwide. The UK£53m market-cap company posted a loss in its most recent financial year of UK£7.0m and a latest trailing-twelve-month loss of UK£8.6m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is Ebiquity's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.
Check out our latest analysis for Ebiquity
Ebiquity is bordering on breakeven, according to the 2 British Media analysts. They expect the company to post a final loss in 2022, before turning a profit of UK£3.7m in 2023. So, the company is predicted to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 168% year-on-year, on average, which is rather optimistic! 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 Ebiquity given that this is a high-level summary, though, bear in mind 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 Ebiquity is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Ebiquity's case is 53%. Note that a higher debt obligation increases the risk in investing in the loss-making company.
Next Steps:
There are too many aspects of Ebiquity to cover in one brief article, but the key fundamentals for the company can all be found in one place – Ebiquity's company page on Simply Wall St. We've also put together a list of essential aspects you should further examine:
Valuation: What is Ebiquity 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 Ebiquity 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 Ebiquity’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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