Ebiquity plc (LON:EBQ) On The Verge Of Breaking Even

We feel now is a pretty good time to analyse Ebiquity plc's (LON:EBQ) business as it appears the company may be on the cusp of a considerable accomplishment. Ebiquity plc, together with its subsidiaries, provides independent media and marketing consultancy worldwide. The UK£25m market-cap company announced a latest loss of UK£3.9m on 31 December 2020 for its most recent financial year result. As path to profitability is the topic on Ebiquity'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.

Check out our latest analysis for Ebiquity

According to the 2 industry analysts covering Ebiquity, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2020, before generating positive profits of UK£652k in 2021. So, the company is predicted to breakeven approximately a year from now or less! At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 136%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Ebiquity's growth isn’t the focus of this broad overview, but, bear in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we would like to bring into light with Ebiquity is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Ebiquity's case is 64%. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of Ebiquity to cover in one brief article, but the key fundamentals for the company can all be found in one place – Ebiquity's company page on Simply Wall St. We've also compiled a list of important factors you should look at:

1. Valuation: What is Ebiquity 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 Ebiquity 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 Ebiquity’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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