AUTO1 Group SE's (ETR:AG1) Profit Outlook

We feel now is a pretty good time to analyse AUTO1 Group SE's (ETR:AG1) business as it appears the company may be on the cusp of a considerable accomplishment. AUTO1 Group SE operates a digital automotive platform for buying and selling used cars online in Europe. The €2.0b market-cap company’s loss lessened since it announced a €116m loss in the full financial year, compared to the latest trailing-twelve-month loss of €76m, as it approaches breakeven. The most pressing concern for investors is AUTO1 Group's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

View our latest analysis for AUTO1 Group

Consensus from 11 of the German Specialty Retail analysts is that AUTO1 Group is on the verge of breakeven. They anticipate the company to incur a final loss in 2024, before generating positive profits of €3.6m in 2025. So, the company is predicted to breakeven just over a year from now. 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 117% is expected, which signals high confidence from analysts. 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 AUTO1 Group given that this is a high-level summary, though, take into account that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we would like to bring into light with AUTO1 Group is its debt-to-equity ratio of 126%. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of AUTO1 Group 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 AUTO1 Group, take a look at AUTO1 Group's company page on Simply Wall St. We've also put together a list of essential aspects you should further examine:

1. Valuation: What is AUTO1 Group 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 AUTO1 Group 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 AUTO1 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. 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.