ABOUT YOU Holding AG's (FRA:YOU) Profit Outlook

By
Simply Wall St
Published
December 30, 2021
DB:YOU
Source: Shutterstock

ABOUT YOU Holding AG (FRA:YOU) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. ABOUT YOU Holding AG, a fashion and technology company, operates fashion and lifestyle e-commerce platforms in Europe. With the latest financial year loss of €151m and a trailing-twelve-month loss of €180m, the €3.6b market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on ABOUT YOU Holding's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for ABOUT YOU Holding

ABOUT YOU Holding is bordering on breakeven, according to the 8 German Online Retail analysts. They expect the company to post a final loss in 2023, before turning a profit of €4.6m in 2024. Therefore, the company is expected to breakeven roughly 3 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 70% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

earnings-per-share-growth
DB:YOU Earnings Per Share Growth December 30th 2021

Underlying developments driving ABOUT YOU Holding's growth isn’t the focus of this broad overview, but, take into account that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we’d like to point out is that ABOUT YOU Holding has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which typically has high debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

This article is not intended to be a comprehensive analysis on ABOUT YOU Holding, so if you are interested in understanding the company at a deeper level, take a look at ABOUT YOU Holding's company page on Simply Wall St. We've also compiled a list of important factors you should further examine:

  1. Valuation: What is ABOUT YOU Holding 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 ABOUT YOU Holding 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 ABOUT YOU Holding’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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