We Might See A Profit From Ascential plc (LON:ASCL) Soon

With the business potentially at an important milestone, we thought we'd take a closer look at Ascential plc's (LON:ASCL) future prospects. Ascential plc provides specialist information, analytics, and e-commerce optimization platforms in the United Kingdom, rest of Europe, the United States, Canada, the Asia Pacific, the Middle East, Africa, and Latin America. With the latest financial year loss of UK£39m and a trailing-twelve-month loss of UK£65m, the UK£1.2b market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on Ascential's investors mind, we've decided to gauge market sentiment. 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 Ascential

Consensus from 9 of the British Media analysts is that Ascential is on the verge of breakeven. They expect the company to post a final loss in 2022, before turning a profit of UK£20m in 2023. So, the company is predicted to breakeven approximately 12 months from now or less. We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 78% is expected, 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 Ascential's growth isn’t the focus of this broad overview, however, 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.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 32% 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 key fundamentals of Ascential 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 Ascential, take a look at Ascential's company page on Simply Wall St. We've also compiled a list of important factors you should further research:

1. Valuation: What is Ascential 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 Ascential 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 Ascential’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.