Delivery Hero SE's (ETR:DHER) Profit Outlook

With the business potentially at an important milestone, we thought we'd take a closer look at Delivery Hero SE's (ETR:DHER) future prospects. Delivery Hero SE offers online food ordering and delivery services. With the latest financial year loss of €3.0b and a trailing-twelve-month loss of €2.3b, the €5.6b market-cap company alleviated its loss by moving closer towards its target of breakeven. As path to profitability is the topic on Delivery Hero's investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

See our latest analysis for Delivery Hero

According to the 19 industry analysts covering Delivery Hero, the consensus is that breakeven is near. They expect the company to post a final loss in 2025, before turning a profit of €167m in 2026. The company is therefore projected to breakeven around 2 years from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 78% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Delivery Hero's growth isn’t the focus of this broad overview, however, bear in mind 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 Delivery Hero is its debt-to-equity ratio of 170%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

There are key fundamentals of Delivery Hero which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Delivery Hero, take a look at Delivery Hero's company page on Simply Wall St. We've also compiled a list of important factors you should further research:

1. Valuation: What is Delivery Hero 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 Delivery Hero 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 Delivery Hero’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.