Yahoo Finance Loss-Making Membership Collective Group Inc. (NYSE:MCG) Expected To Breakeven In The Medium-Term
With the business potentially at an important milestone, we thought we'd take a closer look at Membership Collective Group Inc.'s (NYSE:MCG) future prospects. Membership Collective Group Inc. operates a global membership platform of physical and digital spaces that connects members worldwide. The US$1.4b market-cap company’s loss lessened since it announced a US$326m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$292m, as it approaches breakeven. As path to profitability is the topic on Membership Collective Group's investors mind, we've decided to gauge market sentiment. 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 Membership Collective Group
According to the 6 industry analysts covering Membership Collective Group, the consensus is that breakeven is near. They expect the company to post a final loss in 2023, before turning a profit of US$85m in 2024. The company is therefore projected to breakeven around 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 98% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, we won’t go into details of Membership Collective Group's upcoming projects, though, keep in mind that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing we would like to bring into light with Membership Collective Group is its debt-to-equity ratio of over 2x. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk in investing in the loss-making company.
Next Steps:
There are key fundamentals of Membership Collective 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 Membership Collective Group, take a look at Membership Collective Group's company page on Simply Wall St. We've also compiled a list of key aspects you should look at:
Valuation: What is Membership Collective 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 Membership Collective 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 Membership Collective 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.
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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.