Analysts Expect S4 Capital plc (LON:SFOR) To Breakeven Soon

We feel now is a pretty good time to analyse S4 Capital plc's (LON:SFOR) business as it appears the company may be on the cusp of a considerable accomplishment. S4 Capital plc, together with its subsidiaries, operates as a digital advertising and marketing services company in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The UK£274m market-cap company posted a loss in its most recent financial year of UK£160m and a latest trailing-twelve-month loss of UK£97m shrinking the gap between loss and breakeven. Many investors are wondering about the rate at which S4 Capital will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for S4 Capital

Consensus from 7 of the British Media analysts is that S4 Capital is on the verge of breakeven. They anticipate the company to incur a final loss in 2023, before generating positive profits of UK£9.7m in 2024. The company is therefore projected to breakeven around a year 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 112% 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.

We're not going to go through company-specific developments for S4 Capital given that this is a high-level summary, though, 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’d like to point out is that The company has managed its capital judiciously, with debt making up 38% 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 S4 Capital 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 S4 Capital, take a look at S4 Capital's company page on Simply Wall St. We've also put together a list of pertinent factors you should further examine:

1. Valuation: What is S4 Capital 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 S4 Capital 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 S4 Capital’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.