Spartoo SAS' (EPA:ALSPT) Profit Outlook

With the business potentially at an important milestone, we thought we'd take a closer look at Spartoo SAS' (EPA:ALSPT) future prospects. SPARTOO SAS operates as an online retailer for fashion items in Europe. On 31 December 2024, the €6.5m market-cap company posted a loss of €2.3m for its most recent financial year. As path to profitability is the topic on Spartoo SAS' investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

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Spartoo SAS is bordering on breakeven, according to the 2 French Specialty Retail analysts. They expect the company to post a final loss in 2025, before turning a profit of €150k in 2026. Therefore, the company is expected to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 69% 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.

Given this is a high-level overview, we won’t go into details of Spartoo SAS' upcoming projects, 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.

Check out our latest analysis for Spartoo SAS

Before we wrap up, there’s one issue worth mentioning. Spartoo SAS currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Spartoo SAS' case is 80%. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of Spartoo SAS to cover in one brief article, but the key fundamentals for the company can all be found in one place – Spartoo SAS' company page on Simply Wall St. We've also put together a list of key factors you should further research:

1. Valuation: What is Spartoo SAS 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 Spartoo SAS 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 Spartoo SAS’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. 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.