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Safilo Group S.p.A.'s (BIT:SFL) Shift From Loss To Profit

Simply Wall St
·3-min read

Safilo Group S.p.A.'s (BIT:SFL): Safilo Group S.p.A. engages in the design, production, wholesale, and retail distribution of products for the eyewear market worldwide. The company’s loss has recently broadened since it announced a -€32.4m loss in the full financial year, compared to the latest trailing-twelve-month loss of -€271.5m, moving it further away from breakeven. The most pressing concern for investors is SFL’s path to profitability – when will it breakeven? Below I will provide a high-level summary of the industry analysts’ expectations for SFL.

View our latest analysis for Safilo Group

According to the 4 industry analysts covering SFL, the consensus is breakeven is near. They anticipate the company to incur a final loss in 2020, before generating positive profits of €3.3m in 2021. So, SFL is predicted to breakeven approximately a few months from now. How fast will SFL have to grow each year in order to reach the breakeven point by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 84% 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.

BIT:SFL Past and Future Earnings, February 26th 2020
BIT:SFL Past and Future Earnings, February 26th 2020

Underlying developments driving SFL’s growth isn’t the focus of this broad overview, though, take into account that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before I wrap up, there’s one aspect worth mentioning. SFL has managed its capital prudently, with debt making up 27% of equity. This means that SFL 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 SFL to cover in one brief article, but the key fundamentals for the company can all be found in one place – SFL’s company page on Simply Wall St. I’ve also compiled a list of pertinent aspects you should look at:

  1. Valuation: What is SFL 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 SFL is currently mispriced by the market.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Safilo Group’s board and the CEO’s back ground.

  3. 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.

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.