HomeToGo SE (ETR:HTG) Is Expected To Breakeven In The Near Future

We feel now is a pretty good time to analyse HomeToGo SE's (ETR:HTG) business as it appears the company may be on the cusp of a considerable accomplishment. HomeToGo SE operates a marketplace for vacation rentals that connects users searching for a place to stay in Luxembourg and internationally. The company’s loss has recently broadened since it announced a €31m loss in the full financial year, compared to the latest trailing-twelve-month loss of €40m, moving it further away from breakeven. Many investors are wondering about the rate at which HomeToGo 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.

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According to the 2 industry analysts covering HomeToGo, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2025, before generating positive profits of €1.3m in 2026. Therefore, the company is expected to breakeven just over a year 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 114% 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.

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

Check out our latest analysis for HomeToGo

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 0.9% 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 HomeToGo, so if you are interested in understanding the company at a deeper level, take a look at HomeToGo's company page on Simply Wall St. We've also put together a list of important factors you should further examine:

1. Valuation: What is HomeToGo 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 HomeToGo 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 HomeToGo’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.