Altice Europe N.V.’s (AMS:ATC): Altice Europe N.V. operates as a telecom, content, media, entertainment, and advertising company in France and internationally. The €2.2b market-cap posted a loss in its most recent financial year of -€546.0m and a latest trailing-twelve-month loss of -€144.1m shrinking the gap between loss and breakeven. As path to profitability is the topic on ATC’s investors mind, I’ve decided to gauge market sentiment. In this article, I will touch on the expectations for ATC’s growth and when analysts expect the company to become profitable.
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ATC is bordering on breakeven, according to the 20 Media analysts. They expect the company to post a final loss in 2020, before turning a profit of €359m in 2021. ATC is therefore projected to breakeven around 2 years from now. How fast will ATC have to grow each year in order to reach the breakeven point by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 81% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, ATC may become profitable much later than analysts predict.
I’m not going to go through company-specific developments for ATC given that this is a high-level summary, but, 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 I would like to bring into light with ATC is it currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. Oftentimes, losses exist only on paper but other times, it can be a red flag.
Next Steps:
There are key fundamentals of ATC which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at ATC, take a look at ATC’s company page on Simply Wall St. I’ve also put together a list of important factors you should further research:
- Valuation: What is ATC 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 ATC is currently mispriced by the market.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Altice Europe’s board and the CEO’s back ground.
- 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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.