Mad Paws Holdings Limited (ASX:MPA) Is Expected To Breakeven In The Near Future

Mad Paws Holdings Limited (ASX:MPA) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Mad Paws Holdings Limited operates pet care services online marketplace in Australia. With the latest financial year loss of AU$7.5m and a trailing-twelve-month loss of AU$5.7m, the AU$24m market-cap company alleviated its loss by moving closer towards its target of breakeven. As path to profitability is the topic on Mad Paws Holdings' investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for Mad Paws Holdings

Mad Paws Holdings is bordering on breakeven, according to some Australian Consumer Services analysts. They anticipate the company to incur a final loss in 2024, before generating positive profits of AU$500k in 2025. Therefore, the company is expected to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 113% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for Mad Paws Holdings 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.

One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 2.4% of equity. This means that it 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:

This article is not intended to be a comprehensive analysis on Mad Paws Holdings, so if you are interested in understanding the company at a deeper level, take a look at Mad Paws Holdings' company page on Simply Wall St. We've also compiled a list of relevant factors you should look at:

1. Valuation: What is Mad Paws Holdings 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 Mad Paws Holdings 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 Mad Paws Holdings’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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com