Gaucho Group Holdings, Inc.'s (NASDAQ:VINO) Profit Outlook

By
Simply Wall St
Published
November 15, 2021
NasdaqCM:VINO
Source: Shutterstock

We feel now is a pretty good time to analyse Gaucho Group Holdings, Inc.'s (NASDAQ:VINO) business as it appears the company may be on the cusp of a considerable accomplishment. Gaucho Group Holdings, Inc., through its subsidiaries, invests in, develops, and operates real estate projects in Argentina. With the latest financial year loss of US$6.4m and a trailing-twelve-month loss of US$5.7m, the US$26m market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which Gaucho Group 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 Gaucho Group Holdings

Expectations from some of the American Industrials analysts is that Gaucho Group Holdings is on the verge of breakeven. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$1.3m in 2023. Therefore, the company is expected to breakeven roughly 2 years from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 94% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
NasdaqCM:VINO Earnings Per Share Growth November 16th 2021

Given this is a high-level overview, we won’t go into details of Gaucho Group Holdings' upcoming projects, though, 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.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 4.1% 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:

This article is not intended to be a comprehensive analysis on Gaucho Group Holdings, so if you are interested in understanding the company at a deeper level, take a look at Gaucho Group Holdings' company page on Simply Wall St. We've also compiled a list of relevant aspects you should look at:

  1. Valuation: What is Gaucho Group 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 Gaucho Group 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 Gaucho Group 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.

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