Loss-Making Tuniu Corporation (NASDAQ:TOUR) Set To Breakeven

We feel now is a pretty good time to analyse Tuniu Corporation's (NASDAQ:TOUR) business as it appears the company may be on the cusp of a considerable accomplishment. Tuniu Corporation operates as an online leisure travel company in China. With the latest financial year loss of CN¥99m and a trailing-twelve-month loss of CN¥36m, the US$103m market-cap company alleviated its loss by moving closer towards its target of breakeven. As path to profitability is the topic on Tuniu'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.

Check out our latest analysis for Tuniu

Expectations from some of the American Hospitality analysts is that Tuniu is on the verge of breakeven. They anticipate the company to incur a final loss in 2023, before generating positive profits of CN¥112m in 2024. Therefore, the company is expected to breakeven roughly a year 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 58% is expected, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of Tuniu's upcoming projects, though, take into account that by and large 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 0.003% 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 Tuniu, so if you are interested in understanding the company at a deeper level, take a look at Tuniu'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 Tuniu 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 Tuniu 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 Tuniu’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.