Analysts Are Optimistic We'll See A Profit From Adevinta ASA (OB:ADE)

Adevinta ASA (OB:ADE) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Adevinta ASA owns and operates online classifieds sites. The kr137b market-cap company posted a loss in its most recent financial year of €1.8b and a latest trailing-twelve-month loss of €1.7b shrinking the gap between loss and breakeven. Many investors are wondering about the rate at which Adevinta 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 Adevinta

Adevinta is bordering on breakeven, according to the 15 Norwegian Interactive Media and Services analysts. They expect the company to post a final loss in 2023, before turning a profit of €302m in 2024. Therefore, the company is expected to breakeven roughly 12 months from now or less. We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 111% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Adevinta's growth isn’t the focus of this broad overview, but, take into account that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 22% 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 Adevinta to cover in one brief article, but the key fundamentals for the company can all be found in one place – Adevinta's company page on Simply Wall St. We've also compiled a list of key aspects you should further examine:

1. Valuation: What is Adevinta 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 Adevinta 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 Adevinta’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.