When Will MotorK plc (AMS:MTRK) Turn A Profit?

With the business potentially at an important milestone, we thought we'd take a closer look at MotorK plc's (AMS:MTRK) future prospects. MotorK plc, together with its subsidiaries, provides software-as-a-service for the automotive retail industry in Italy, Spain, France, and Germany. The €76m market-cap company posted a loss in its most recent financial year of €14m and a latest trailing-twelve-month loss of €15m leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which MotorK will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

See our latest analysis for MotorK

According to the 3 industry analysts covering MotorK, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2023, before generating positive profits of €2.0m in 2024. The company is therefore projected to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 112% year-on-year, on average, which is rather optimistic! 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 MotorK given that this is a high-level summary, but, bear in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 13% 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 MotorK 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 MotorK, take a look at MotorK's company page on Simply Wall St. We've also compiled a list of pertinent aspects you should further examine:

1. Valuation: What is MotorK 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 MotorK 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 MotorK’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.