Auction Technology Group plc (LON:ATG): Are Analysts Optimistic?

By
Simply Wall St
Published
May 22, 2021
LSE:ATG
Source: Shutterstock

With the business potentially at an important milestone, we thought we'd take a closer look at Auction Technology Group plc's (LON:ATG) future prospects. Auction Technology Group plc operates marketplaces and a proprietary auction platform in the United Kingdom, the United States, Austria, Germany, and Switzerland. On 30 September 2020, the UK£985m market-cap company posted a loss of UK£16m for its most recent financial year. The most pressing concern for investors is Auction Technology Group's path to profitability – when will it 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 Auction Technology Group

Auction Technology Group is bordering on breakeven, according to the 2 British Online Retail analysts. They anticipate the company to incur a final loss in 2021, before generating positive profits of UK£9.7m in 2022. The company is therefore projected to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 89% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
LSE:ATG Earnings Per Share Growth May 23rd 2021

Underlying developments driving Auction Technology Group's growth isn’t the focus of this broad overview, however, bear in mind that typically 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 issue worth mentioning. Auction Technology Group currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. These losses tend to occur only on paper, however, in other cases it can be forewarning.

Next Steps:

This article is not intended to be a comprehensive analysis on Auction Technology Group, so if you are interested in understanding the company at a deeper level, take a look at Auction Technology Group's company page on Simply Wall St. We've also put together a list of essential factors you should further examine:

  1. Valuation: What is Auction Technology Group 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 Auction Technology Group 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 Auction Technology Group’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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