Casino, Guichard-Perrachon Société Anonyme (EPA:CO) Could Be Less Than A Year Away From Profitability

We feel now is a pretty good time to analyse Casino, Guichard-Perrachon Société Anonyme's (EPA:CO) business as it appears the company may be on the cusp of a considerable accomplishment. Casino, Guichard-Perrachon Société Anonyme operates as a food retailer in France and internationally. On 31 December 2020, the €2.9b market-cap company posted a loss of €405m for its most recent financial year. As path to profitability is the topic on Casino Guichard-Perrachon Société Anonyme'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 Casino Guichard-Perrachon Société Anonyme

Casino Guichard-Perrachon Société Anonyme is bordering on breakeven, according to the 10 French Consumer Retailing analysts. They expect the company to post a final loss in 2020, before turning a profit of €290m in 2021. So, the company is predicted to breakeven approximately 12 months from now or less. We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 110% is expected, which signals high confidence from analysts. 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 Casino Guichard-Perrachon Société Anonyme's upcoming projects, however, keep in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we would like to bring into light with Casino Guichard-Perrachon Société Anonyme is its debt-to-equity ratio of 132%. Typically, debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Casino Guichard-Perrachon Société Anonyme, so if you are interested in understanding the company at a deeper level, take a look at Casino Guichard-Perrachon Société Anonyme's company page on Simply Wall St. We've also compiled a list of relevant aspects you should further research:

1. Valuation: What is Casino Guichard-Perrachon Société Anonyme 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 Casino Guichard-Perrachon Société Anonyme 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 Casino Guichard-Perrachon Société Anonyme’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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