Yahoo Finance When Will eve Sleep Plc (LON:EVE) Turn A Profit?
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eve Sleep Plc's (LON:EVE): eve Sleep Plc operates as a direct to consumer e-commerce sleep brand worldwide. On 31 December 2018, the UK£17m market-cap posted a loss of -UK£20.1m for its most recent financial year. Many investors are wondering the rate at which EVE will turn a profit, with the big question being “when will the company breakeven?” Below I will provide a high-level summary of the industry analysts’ expectations for EVE.
View our latest analysis for eve Sleep
EVE is bordering on breakeven, according to Online Retail analysts. They expect the company to post a final loss in 2020, before turning a profit of UK£2.4m in 2021. EVE is therefore projected to breakeven around 2 years from today. In order to meet this breakeven date, I calculated the rate at which EVE must grow year-on-year. It turns out an average annual growth rate of 84% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, EVE may become profitable much later than analysts predict.
I’m not going to go through company-specific developments for EVE 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 I’d like to point out is that EVE has no debt on its balance sheet, which is quite unusual for a cash-burning loss-making, growth company, which usually has a high level of debt relative to its equity. EVE currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
Next Steps:
There are key fundamentals of EVE which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at EVE, take a look at EVE’s company page on Simply Wall St. I’ve also compiled a list of important aspects you should further examine:
Valuation: What is EVE 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 EVE 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 eve Sleep’s board and the CEO’s back ground.
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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If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
