Yahoo Finance PCI-PAL PLC (LON:PCIP): When Will It Breakeven?
We feel now is a pretty good time to analyse PCI-PAL PLC's (LON:PCIP) business as it appears the company may be on the cusp of a considerable accomplishment. PCI-PAL PLC, through its subsidiaries, provides payment card industry (PCI) compliance solutions and telephony services primarily in the United Kingdom, the United States, Canada, rest of Europe, the Asia Pacific, and the Middle East. On 30 June 2022, the UK£35m market-cap company posted a loss of UK£2.9m for its most recent financial year. As path to profitability is the topic on PCI-PAL's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.
Check out our latest analysis for PCI-PAL
Expectations from some of the British IT analysts is that PCI-PAL is on the verge of breakeven. They expect the company to post a final loss in 2023, before turning a profit of UK£700k in 2024. The company is therefore projected to breakeven just over a year 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 93% year-on-year, on average, 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 PCI-PAL's upcoming projects, though, keep in mind that generally 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 PCI-PAL has no debt on its balance sheet, which is rare for a loss-making growth company, which usually has a high level of debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on PCI-PAL, so if you are interested in understanding the company at a deeper level, take a look at PCI-PAL's company page on Simply Wall St. We've also put together a list of important factors you should look at:
Valuation: What is PCI-PAL 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 PCI-PAL 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 PCI-PAL’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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