Market Sentiment Around Loss-Making PAULIC Meunerie SA (EPA:ALPAU)

With the business potentially at an important milestone, we thought we'd take a closer look at PAULIC Meunerie SA's (EPA:ALPAU) future prospects. PAULIC Meunerie SA produces and sells wheat and buckwheat flour for professionals in the bakery, crêperie, and food industry in France and internationally. On 31 December 2020, the €40m market-cap company posted a loss of €509k for its most recent financial year. As path to profitability is the topic on PAULIC Meunerie'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.

View our latest analysis for PAULIC Meunerie

Expectations from some of the French Food analysts is that PAULIC Meunerie is on the verge of breakeven. They expect the company to post a final loss in 2022, before turning a profit of €2.6m in 2023. Therefore, the company is expected to breakeven roughly 2 years from today. 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 90% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving PAULIC Meunerie's growth isn’t the focus of this broad overview, though, take into account 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 PAULIC Meunerie is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in PAULIC Meunerie's case is 96%. 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 key fundamentals of PAULIC Meunerie which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at PAULIC Meunerie, take a look at PAULIC Meunerie's company page on Simply Wall St. We've also compiled a list of pertinent aspects you should look at:

1. Valuation: What is PAULIC Meunerie 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 PAULIC Meunerie 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 PAULIC Meunerie’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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