Analysts Expect Breakeven For Promotora de Informaciones, S.A. (BME:PRS) Before Long

We feel now is a pretty good time to analyse Promotora de Informaciones, S.A.'s (BME:PRS) business as it appears the company may be on the cusp of a considerable accomplishment. Promotora de Informaciones, S.A., together with its subsidiaries, engages in the exploitation of printed and audiovisual media in Spain and internationally. The €495m market-cap company posted a loss in its most recent financial year of €55m and a latest trailing-twelve-month loss of €147m leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which Promotora de Informaciones will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

See our latest analysis for Promotora de Informaciones

Promotora de Informaciones is bordering on breakeven, according to the 6 Spanish Media analysts. They anticipate the company to incur a final loss in 2020, before generating positive profits of €86m in 2021. 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 77% 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.

We're not going to go through company-specific developments for Promotora de Informaciones given that this is a high-level summary, however, bear in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one issue worth mentioning. Promotora de Informaciones currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. These losses tend to occur only on paper, however, in other cases it can be forewarning.

Next Steps:

This article is not intended to be a comprehensive analysis on Promotora de Informaciones, so if you are interested in understanding the company at a deeper level, take a look at Promotora de Informaciones' company page on Simply Wall St. We've also put together a list of relevant factors you should further examine:

1. Valuation: What is Promotora de Informaciones 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 Promotora de Informaciones 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 Promotora de Informaciones’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. 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.
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