Zur Rose Group AG (VTX:ROSE) Is Expected To Breakeven In The Near Future

Zur Rose Group AG (VTX:ROSE) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Zur Rose Group AG operates an e-commerce pharmacy and a wholesale business for medical and pharmaceutical products under the Zur Rose and DocMorris brands in Germany, Switzerland, and rest of Europe. The CHF2.9b market-cap company posted a loss in its most recent financial year of CHF52m and a latest trailing-twelve-month loss of CHF88m leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which Zur Rose Group will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

View our latest analysis for Zur Rose Group

Consensus from 8 of the Swiss Consumer Retailing analysts is that Zur Rose Group is on the verge of breakeven. They anticipate the company to incur a final loss in 2021, before generating positive profits of CHF6.9m in 2022. So, the company is predicted to breakeven approximately 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 74%, which is rather optimistic! 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 Zur Rose Group given that this is a high-level summary, though, take into account that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we would like to bring into light with Zur Rose Group is its debt-to-equity ratio of 134%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

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

1. Historical Track Record: What has Zur Rose 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 Zur Rose 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. 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.
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