Yahoo Finance When Will Nightcap Plc (LON:NGHT) Turn A Profit?
We feel now is a pretty good time to analyse Nightcap Plc's (LON:NGHT) business as it appears the company may be on the cusp of a considerable accomplishment. Nightcap Plc operates bars in the United Kingdom. The UK£29m market-cap company posted a loss in its most recent financial year of UK£5.4m and a latest trailing-twelve-month loss of UK£5.9m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is Nightcap's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
Check out our latest analysis for Nightcap
Nightcap is bordering on breakeven, according to some British Hospitality analysts. They expect the company to post a final loss in 2022, before turning a profit of UK£3.7m in 2023. Therefore, the company is expected to breakeven just over a year from now. 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 96% is expected, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Given this is a high-level overview, we won’t go into details of Nightcap's upcoming projects, however, take into account that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before we wrap up, there’s one issue worth mentioning. Nightcap currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Nightcap's case is 43%. Note that a higher debt obligation increases the risk around investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on Nightcap, so if you are interested in understanding the company at a deeper level, take a look at Nightcap's company page on Simply Wall St. We've also compiled a list of essential aspects you should further examine:
Valuation: What is Nightcap 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 Nightcap 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 Nightcap’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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