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Pharmasimple SA’s (EPA:ALPHS): Pharmasimple SA operates a Website for medicines, cosmetics, and food supplements in Belgium and France. With the latest financial year loss of -€1.4m and a trailing-twelve month of -€1.9m, the €17m market-cap amplifies its loss by moving further away from its breakeven target. The most pressing concern for investors is ALPHS’s path to profitability – when will it breakeven? In this article, I will touch on the expectations for ALPHS’s growth and when analysts expect the company to become profitable.
Expectation from Online Retail analysts is ALPHS is on the verge of breakeven. They expect the company to post a final loss in 2019, before turning a profit of €700k in 2020. So, ALPHS is predicted to breakeven approximately a few months from now. In order to meet this breakeven date, I calculated the rate at which ALPHS must grow year-on-year. It turns out an average annual growth rate of 82% is expected, which signals high confidence from analysts. If this rate turns out to be too aggressive, ALPHS may become profitable much later than analysts predict.
I’m not going to go through company-specific developments for ALPHS given that this is a high-level summary, however, take into account that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before I wrap up, there’s one issue worth mentioning. ALPHS currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in ALPHS’s case is 63%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.
There are key fundamentals of ALPHS which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at ALPHS, take a look at ALPHS’s company page on Simply Wall St. I’ve also compiled a list of relevant aspects you should further examine:
- Valuation: What is ALPHS 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 ALPHS 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 Pharmasimple’s board and the CEO’s back ground.
- 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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.