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Ten Lifestyle Group Plc (LON:TENG) Is Expected To Breakeven

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Ten Lifestyle Group Plc's (LON:TENG): Ten Lifestyle Group plc provides concierge services to private banks, retail banks, premium payment card providers, and high-net-worth individuals worldwide. With the latest financial year loss of -UK£8.1m and a trailing-twelve month of -UK£8.3m, the UK£99m market-cap amplifies its loss by moving further away from its breakeven target. The most pressing concern for investors is TENG’s path to profitability – when will it breakeven? I’ve put together a brief outline of industry analyst expectations for TENG, its year of breakeven and its implied growth rate.

See our latest analysis for Ten Lifestyle Group

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Consensus from the 2 Online Retail analysts is TENG is on the verge of breakeven. They expect the company to post a final loss in 2020, before turning a profit of UK£5.7m in 2021. TENG is therefore projected to breakeven around 2 years from today. In order to meet this breakeven date, I calculated the rate at which TENG must grow year-on-year. It turns out an average annual growth rate of 84% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

AIM:TENG Past and Future Earnings, July 19th 2019
AIM:TENG Past and Future Earnings, July 19th 2019

Given this is a high-level overview, I won’t go into details of TENG’s upcoming projects, though, bear in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing I’d like to point out is that TENG has managed its capital prudently, with debt making up 0.3% of equity. This means that TENG 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:

This article is not intended to be a comprehensive analysis on TENG, so if you are interested in understanding the company at a deeper level, take a look at TENG’s company page on Simply Wall St. I’ve also compiled a list of relevant factors you should further examine:

  1. Valuation: What is TENG 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 TENG 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 Ten Lifestyle 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.

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.

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. Thank you for reading.