Loss-Making Marley Spoon SE (ASX:MMM) Expected To Breakeven In The Medium-Term

Marley Spoon SE (ASX:MMM) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Marley Spoon SE provides subscription-based weekly meal kit services in Australia, the United States, Austria, Belgium, Denmark, Sweden, Germany, and the Netherlands. The AU$49m market-cap company announced a latest loss of €40m on 31 December 2022 for its most recent financial year result. The most pressing concern for investors is Marley Spoon's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

View our latest analysis for Marley Spoon

Marley Spoon is bordering on breakeven, according to the 2 Australian Consumer Retailing analysts. They expect the company to post a final loss in 2024, before turning a profit of €11m in 2025. The company is therefore projected to breakeven around 2 years from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 87%, 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 Marley Spoon's growth isn’t the focus of this broad overview, however, bear in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we would like to bring into light with Marley Spoon is it currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. Oftentimes, losses exist only on paper but other times, it can be a red flag.

Next Steps:

There are key fundamentals of Marley Spoon which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Marley Spoon, take a look at Marley Spoon's company page on Simply Wall St. We've also compiled a list of important factors you should look at:

1. Valuation: What is Marley Spoon 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 Marley Spoon 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 Marley Spoon’s board and the CEO’s background.
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.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.