S4 Capital plc (LON:SFOR) Is Expected To Breakeven In The Near Future

With the business potentially at an important milestone, we thought we'd take a closer look at S4 Capital plc's (LON:SFOR) future prospects. S4 Capital plc, together with its subsidiaries, provides digital advertising and marketing services in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The UK£297m market-cap company announced a latest loss of UK£6.0m on 31 December 2023 for its most recent financial year result. 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?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

View our latest analysis for S4 Capital

S4 Capital is bordering on breakeven, according to the 6 British Media analysts. They anticipate the company to incur a final loss in 2025, before generating positive profits of UK£11m in 2026. The company is therefore projected to breakeven around 2 years 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 59%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving S4 Capital's growth isn’t the focus of this broad overview, though, take into account that by and large 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 prudently, with debt making up 37% 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 compiled a list of pertinent aspects 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.