YPB Group Limited's (ASX:YPB): YPB Group Limited operates as a product authentication and consumer engagement solution provider. The AU$3.4m market-cap company announced a latest loss of -AU$8.0m on 31 December 2019 for its most recent financial year result. As path to profitability is the topic on YPB’s investors mind, I’ve decided to gauge market sentiment. Below I will provide a high-level summary of the industry analysts’ expectations for YPB.
YPB is bordering on breakeven, according to Professional Services analysts. They anticipate the company to incur a final loss in 2020, before generating positive profits of AU$1.8m in 2021. So, YPB is predicted to breakeven approximately a couple of months from now! How fast will YPB 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 86% 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.
Underlying developments driving YPB’s growth isn’t the focus of this broad overview, but, take into account that typically 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 YPB has managed its capital prudently, with debt making up 28% of equity. This means that YPB has predominantly funded its operations from equity capital,and its low debt obligation reduces the risk around investing in the loss-making company.
There are key fundamentals of YPB 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 YPB, take a look at YPB’s company page on Simply Wall St. I’ve also put together a list of pertinent factors you should further research:
- Valuation: What is YPB 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 YPB 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 YPB Group’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.
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