When Will Groupe Gorgé SA (EPA:GOE) Turn A Profit?

We feel now is a pretty good time to analyse Groupe Gorgé SA's (EPA:GOE) business as it appears the company may be on the cusp of a considerable accomplishment. Groupe Gorgé SA operates in the areas of smart safety systems, protection of high-risk installations, and 3D printing in France, Europe, and internationally. With the latest financial year loss of €680k and a trailing-twelve-month loss of €7.3m, the €183m market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on Groupe Gorgé's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

Check out our latest analysis for Groupe Gorgé

According to the 3 industry analysts covering Groupe Gorgé, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2020, before generating positive profits of €5.9m in 2021. Therefore, the company is expected 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 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 112% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Groupe Gorgé's growth isn’t the focus of this broad overview, however, keep in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we would like to bring into light with Groupe Gorgé is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Groupe Gorgé's case is 68%. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

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

1. Valuation: What is Groupe Gorgé 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 Groupe Gorgé 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 Groupe Gorgé’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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