When Will Parlem Telecom Companyia de Telecomunicacions, S.A. (BME:PAR) Breakeven?

Parlem Telecom Companyia de Telecomunicacions, S.A. (BME:PAR) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Parlem Telecom Companyia de Telecomunicacions, S.A. The €65m market-cap company announced a latest loss of €4.4m on 31 December 2023 for its most recent financial year result. As path to profitability is the topic on Parlem Telecom Companyia de Telecomunicacions' investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

See our latest analysis for Parlem Telecom Companyia de Telecomunicacions

Parlem Telecom Companyia de Telecomunicacions is bordering on breakeven, according to the 2 Spanish Telecom analysts. They expect the company to post a final loss in 2024, before turning a profit of €1.0m in 2025. So, the company is predicted to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 103% year-on-year, on average, 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 Parlem Telecom Companyia de Telecomunicacions given that this is a high-level summary, but, take into account that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one issue worth mentioning. Parlem Telecom Companyia de Telecomunicacions 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 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 too many aspects of Parlem Telecom Companyia de Telecomunicacions to cover in one brief article, but the key fundamentals for the company can all be found in one place – Parlem Telecom Companyia de Telecomunicacions' company page on Simply Wall St. We've also put together a list of relevant aspects you should further research:

1. Historical Track Record: What has Parlem Telecom Companyia de Telecomunicacions' 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 Parlem Telecom Companyia de Telecomunicacions' 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.