Clarivate Plc's (NYSE:CLVT) Path To Profitability

We feel now is a pretty good time to analyse Clarivate Plc's (NYSE:CLVT) business as it appears the company may be on the cusp of a considerable accomplishment. Clarivate Plc operates as an information services provider in the Americas, the Middle East, Africa, Europe, and the Asia Pacific. The company’s loss has recently broadened since it announced a US$987m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$1.3b, moving it further away from breakeven. As path to profitability is the topic on Clarivate's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for Clarivate

Consensus from 9 of the American Professional Services analysts is that Clarivate is on the verge of breakeven. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$840k in 2025. The company is therefore projected to breakeven just over a year from today. 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 96% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won’t go into details of Clarivate's upcoming projects, but, keep 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 would like to bring into light with Clarivate is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Clarivate's case is 83%. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

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

1. Valuation: What is Clarivate 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 Clarivate 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 Clarivate’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.