When Will HBX Group International plc (BME:HBX) Become Profitable?

We feel now is a pretty good time to analyse HBX Group International plc's (BME:HBX) business as it appears the company may be on the cusp of a considerable accomplishment. HBX Group International plc engages in the intermediation of hotel accommodation. The €1.8b market-cap company posted a loss in its most recent financial year of €24m and a latest trailing-twelve-month loss of €129m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is HBX Group International's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

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HBX Group International is bordering on breakeven, according to the 10 Spanish Hospitality analysts. They anticipate the company to incur a final loss in 2025, before generating positive profits of €216m in 2026. Therefore, the company is expected to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 60% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won’t go into details of HBX Group International's upcoming projects, but, keep in mind that generally 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 HBX Group International

One thing we would like to bring into light with HBX Group International is its debt-to-equity ratio of 174%. Typically, debt shouldn’t exceed 40% of your equity, which in this case, the company 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 key fundamentals of HBX Group International 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 HBX Group International, take a look at HBX Group International's company page on Simply Wall St. We've also put together a list of relevant factors you should further examine:

1. Valuation: What is HBX Group International 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 HBX Group International 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 HBX Group International’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.