Stock Analysis

Talenthouse AG's (VTX:THAG) Path To Profitability

  •  Updated
Source: Shutterstock

Talenthouse AG (VTX:THAG) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Talenthouse AG operates a platform that connects creatives with brands and celebrities. The company’s loss has recently broadened since it announced a CHF231k loss in the full financial year, compared to the latest trailing-twelve-month loss of CHF1.0m, moving it further away from breakeven. Many investors are wondering about the rate at which Talenthouse will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Our analysis indicates that THAG is potentially overvalued!

Expectations from some of the Swiss Capital Markets analysts is that Talenthouse is on the verge of breakeven. They expect the company to post a final loss in 2023, before turning a profit of CHF4.6m in 2024. So, the company is predicted to breakeven approximately 2 years from today. 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 34%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

SWX:THAG Earnings Per Share Growth October 30th 2022

Given this is a high-level overview, we won’t go into details of Talenthouse's upcoming projects, though, take into account that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 7.7% 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 Talenthouse, so if you are interested in understanding the company at a deeper level, take a look at Talenthouse's company page on Simply Wall St. We've also put together a list of key aspects you should further examine:

  1. Historical Track Record: What has Talenthouse'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 Talenthouse'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 Talenthouse 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.

View the Free Analysis