Amer Sports, Inc. (NYSE:AS) On The Verge Of Breaking Even

We feel now is a pretty good time to analyse Amer Sports, Inc.'s (NYSE:AS) business as it appears the company may be on the cusp of a considerable accomplishment. Amer Sports, Inc. designs, manufactures, markets, distributes, and sells sports equipment, apparel, footwear, and accessories in Europe, the Middle East, Africa, the Americas, China, and the Asia Pacific. The US$9.5b market-cap company’s loss lessened since it announced a US$209m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$129m, as it approaches breakeven. As path to profitability is the topic on Amer Sports' 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.

See our latest analysis for Amer Sports

According to the 20 industry analysts covering Amer Sports, the consensus is that breakeven is near. They expect the company to post a final loss in 2023, before turning a profit of US$186m in 2024. So, the company is predicted to breakeven approximately 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 47% is expected, which is extremely buoyant. 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 Amer Sports given that this is a high-level summary, however, take into account 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 issue worth mentioning. Amer Sports currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Amer Sports' case is 51%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

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

1. Valuation: What is Amer Sports 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 Amer Sports 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 Amer Sports’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.