Analysts Expect Breakeven For Aston Martin Lagonda Global Holdings plc (LON:AML) Before Long

Aston Martin Lagonda Global Holdings plc (LON:AML) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Aston Martin Lagonda Global Holdings plc designs, develops, manufactures, markets, and sells luxury sports cars worldwide. The UK£1.3b market-cap company announced a latest loss of UK£228m on 31 December 2023 for its most recent financial year result. The most pressing concern for investors is Aston Martin Lagonda Global Holdings' path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

View our latest analysis for Aston Martin Lagonda Global Holdings

Consensus from 9 of the British Auto analysts is that Aston Martin Lagonda Global Holdings is on the verge of breakeven. They anticipate the company to incur a final loss in 2024, before generating positive profits of UK£26m in 2025. So, the company is predicted to breakeven just over a year from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 74%, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for Aston Martin Lagonda Global Holdings given that this is a high-level summary, however, keep in mind that typically 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 Aston Martin Lagonda Global Holdings is its debt-to-equity ratio of 120%. Generally, the rule of thumb is 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 in investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Aston Martin Lagonda Global Holdings, so if you are interested in understanding the company at a deeper level, take a look at Aston Martin Lagonda Global Holdings' company page on Simply Wall St. We've also compiled a list of pertinent aspects you should further examine:

1. Valuation: What is Aston Martin Lagonda Global Holdings 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 Aston Martin Lagonda Global Holdings 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 Aston Martin Lagonda Global Holdings’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.