When Will MyBucks SA. (FRA:MBC) Turn A Profit?

MyBucks SA.’s (DB:MBC): MyBucks S.A., a financial technology company, provides various financial products and services to the low and middle-income customers. On 30 June 2017, the €162.07M market-cap posted a loss of -€13.14M for its most recent financial year. Many investors are wondering the rate at which MBC will turn a profit, with the big question being “when will the company breakeven?” I’ve put together a brief outline of industry analyst expectations for MBC, its year of breakeven and its implied growth rate.

See our latest analysis for MyBucks

MBC is bordering on breakeven, according to analysts. They anticipate the company to incur a final loss in 2018, before generating positive profits of €6.10M in 2019. So, MBC is predicted to breakeven approximately a few months from now. What rate will MBC have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 97.35%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

DB:MBC Past Future Earnings Mar 16th 18
DB:MBC Past Future Earnings Mar 16th 18

I’m not going to go through company-specific developments for MBC given that this is a high-level summary, but, 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.

Before I wrap up, there’s one issue worth mentioning. MBC currently has a debt-to-equity ratio of over 2x. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in MBC’s case, it has significantly overshot. 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 MBC to cover in one brief article, but the key fundamentals for the company can all be found in one place – MBC’s company page on Simply Wall St. I’ve also put together a list of relevant aspects you should look at:

  1. Historical Track Record: What has MBC’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 MyBucks’s board and the CEO’s back ground.
  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.