Yahoo Finance Merit Group plc (LON:MRIT) Could Be Less Than A Year Away From Profitability
We feel now is a pretty good time to analyse Merit Group plc's (LON:MRIT) business as it appears the company may be on the cusp of a considerable accomplishment. Merit Group plc gathers, organizes, and enriches data that informs b2b intelligence brands in the United Kingdom, Belgium, the United States, France, Germany, and internationally. The UK£16m market-cap company posted a loss in its most recent financial year of UK£3.6m and a latest trailing-twelve-month loss of UK£2.8m shrinking the gap between loss and breakeven. As path to profitability is the topic on Merit 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.
See our latest analysis for Merit Group
Expectations from some of the British Media analysts is that Merit Group is on the verge of breakeven. They expect the company to post a final loss in 2023, before turning a profit of UK£200k in 2024. The company is therefore projected to breakeven around a year from now or less! How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 169% year-on-year, on average, which is rather optimistic! 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 Merit Group given that this is a high-level summary, but, bear in mind that by and large 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 11% 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:
There are too many aspects of Merit Group to cover in one brief article, but the key fundamentals for the company can all be found in one place – Merit Group's company page on Simply Wall St. We've also put together a list of pertinent factors you should further research:
Valuation: What is Merit 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 Merit 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 Merit 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.
