Pierre et Vacances SA (EPA:VAC): Is Breakeven Near?

We feel now is a pretty good time to analyse Pierre et Vacances SA's (EPA:VAC) business as it appears the company may be on the cusp of a considerable accomplishment. Pierre et Vacances SA, through its subsidiaries, engages in the holiday accommodation and holiday property investment business. On 30 September 2020, the €115m market-cap company posted a loss of €425m for its most recent financial year. The most pressing concern for investors is Pierre et Vacances' path to profitability – when will it 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 Pierre et Vacances

According to the 4 industry analysts covering Pierre et Vacances, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2022, before generating positive profits of €23m in 2023. The company is therefore projected to breakeven around 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 100% year-on-year, on average, 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 Pierre et Vacances' upcoming projects, though, take into account 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. Pierre et Vacances 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 Pierre et Vacances, so if you are interested in understanding the company at a deeper level, take a look at Pierre et Vacances' company page on Simply Wall St. We've also put together a list of key aspects you should further research:

1. Valuation: What is Pierre et Vacances 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 Pierre et Vacances 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 Pierre et Vacances’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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