We feel now is a pretty good time to analyse Gresham House plc's (LON:GHE) business as it appears the company may be on the cusp of a considerable accomplishment. Gresham House plc is a publicly owned investment manager. With the latest financial year loss of UK£905k and a trailing-twelve-month loss of UK£2.5m, the UK£232m market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on Gresham House's 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.
See our latest analysis for Gresham House
According to the 3 industry analysts covering Gresham House, the consensus is that breakeven is near. They expect the company to post a final loss in 2020, before turning a profit of UK£1.2m in 2021. The company is therefore projected to breakeven just over a year from now. 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 104% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving Gresham House's growth isn’t the focus of this broad overview, but, 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.
Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
Next Steps:
There are too many aspects of Gresham House to cover in one brief article, but the key fundamentals for the company can all be found in one place – Gresham House's company page on Simply Wall St. We've also put together a list of important factors you should further examine:
- Historical Track Record: What has Gresham House's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Gresham House's board and the CEO’s background.
- 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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About AIM:GHE
Flawless balance sheet with proven track record.
