Snap One Holdings Corp. (NASDAQ:SNPO): Are Analysts Optimistic?

With the business potentially at an important milestone, we thought we'd take a closer look at Snap One Holdings Corp.'s (NASDAQ:SNPO) future prospects. Snap One Holdings Corp. provides smart living solutions in the United States and internationally. With the latest financial year loss of US$8.6m and a trailing-twelve-month loss of US$20m, the US$575m market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on Snap One Holdings' investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

Check out our latest analysis for Snap One Holdings

Snap One Holdings is bordering on breakeven, according to the 8 American Consumer Durables analysts. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$1.5m in 2025. The company is therefore projected to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 71% 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.

Underlying developments driving Snap One Holdings' growth isn’t the focus of this broad overview, however, keep in mind that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we would like to bring into light with Snap One Holdings is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Snap One Holdings' case is 66%. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

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

1. Valuation: What is Snap One 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 Snap One 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 Snap One 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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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.