Plenti Group Limited's (ASX:PLT) Shift From Loss To Profit

With the business potentially at an important milestone, we thought we'd take a closer look at Plenti Group Limited's (ASX:PLT) future prospects. Plenti Group Limited engages in the fintech lending and investment business in Australia. On 31 March 2024, the AU$137m market-cap company posted a loss of AU$15m for its most recent financial year. Many investors are wondering about the rate at which Plenti Group will turn a profit, with the big question being “when will the company 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 Plenti Group

Plenti Group is bordering on breakeven, according to some Australian Consumer Finance analysts. They anticipate the company to incur a final loss in 2026, before generating positive profits of AU$7.8m in 2027. Therefore, the company is expected to breakeven roughly 3 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2027? Working backwards from analyst estimates, it turns out that they expect the company to grow 106% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Plenti Group's growth isn’t the focus of this broad overview, though, take into account that by and large 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 issue worth mentioning. Plenti Group currently has a debt-to-equity ratio of over 2x. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

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

1. Historical Track Record: What has Plenti Group's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Plenti Group'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.