YPB Group Limited's (ASX:YPB) Profit Outlook

By
Simply Wall St
Published
June 11, 2020

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.

View our latest analysis for YPB Group

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.

ASX:YPB Past and Future Earnings June 12th 2020

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.

Next Steps:

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:

  1. 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.
  2. 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.
  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.

Love or hate this article? Concerned about the content? Get in touch with us directly. Alternatively, email 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. 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. Thank you for reading.

Promoted
When trading YPB Group or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.


Simply Wall St character - Warren

Simply Wall St

Simply Wall St is a financial technology startup focused on providing unbiased, high-quality research coverage on every listed company in the world. Our research team consists of equity analysts with a public, market-beating track record. Learn more about the team behind Simply Wall St.