Breakeven Is Near for The Panoply Holdings plc (LON:TPX)

The Panoply Holdings plc (LON:TPX) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. The Panoply Holdings plc, together with its subsidiaries, provides digital native technology services in the United Kingdom, Bulgaria, and Norway. The UK£130m market-cap company posted a loss in its most recent financial year of UK£3.0m and a latest trailing-twelve-month loss of UK£5.0m leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which Panoply Holdings 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 Panoply Holdings

Panoply Holdings is bordering on breakeven, according to the 2 British IT analysts. They anticipate the company to incur a final loss in 2020, before generating positive profits of UK£2.3m in 2021. The company is therefore projected to breakeven around 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 81%, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of Panoply Holdings' upcoming projects, however, keep 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 prudently, with debt making up 19% 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 too many aspects of Panoply Holdings to cover in one brief article, but the key fundamentals for the company can all be found in one place – Panoply Holdings' company page on Simply Wall St. We've also put together a list of essential factors you should further research:

1. Valuation: What is Panoply Holdings 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 Panoply Holdings 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 Panoply Holdings’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.

If you’re looking to trade Panoply Holdings, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

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