Stock Analysis

Helloworld Travel Limited (ASX:HLO) Could Be Less Than A Year Away From Profitability

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We feel now is a pretty good time to analyse Helloworld Travel Limited's (ASX:HLO) business as it appears the company may be on the cusp of a considerable accomplishment. Helloworld Travel Limited operates as a travel distribution company in Australia, New Zealand, and internationally. The AU$294m market-cap company announced a latest loss of AU$28m on 30 June 2022 for its most recent financial year result. As path to profitability is the topic on Helloworld Travel's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

Check out our latest analysis for Helloworld Travel

Consensus from 5 of the Australian Hospitality analysts is that Helloworld Travel is on the verge of breakeven. They anticipate the company to incur a final loss in 2022, before generating positive profits of AU$1.2m in 2023. Therefore, the company is expected to breakeven roughly a year from now or less! We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 74% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

ASX:HLO Earnings Per Share Growth January 31st 2023

We're not going to go through company-specific developments for Helloworld Travel given that this is a high-level summary, though, take into account that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one aspect worth mentioning. Helloworld Travel currently has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which usually has a high level of debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

There are too many aspects of Helloworld Travel to cover in one brief article, but the key fundamentals for the company can all be found in one place – Helloworld Travel's company page on Simply Wall St. We've also compiled a list of important aspects you should look at:

  1. Valuation: What is Helloworld Travel 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 Helloworld Travel 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 Helloworld Travel’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.

Valuation is complex, but we're helping make it simple.

Find out whether Helloworld Travel is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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