When Can We Expect A Profit From Vasta Platform Limited (NASDAQ:VSTA)?

By
Simply Wall St
Published
July 01, 2021
NasdaqGS:VSTA
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We feel now is a pretty good time to analyse Vasta Platform Limited's (NASDAQ:VSTA) business as it appears the company may be on the cusp of a considerable accomplishment. Vasta Platform Limited, an education company, provides educational and digital solutions to private schools operating in the K-12 educational sector in Brazil. The company’s loss has recently broadened since it announced a R$46m loss in the full financial year, compared to the latest trailing-twelve-month loss of R$79m, moving it further away from breakeven. As path to profitability is the topic on Vasta Platform'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 Vasta Platform

According to the 6 industry analysts covering Vasta Platform, the consensus is that breakeven is near. They expect the company to post a final loss in 2021, before turning a profit of R$144m in 2022. Therefore, the company is expected to breakeven just over a year from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 108%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

earnings-per-share-growth
NasdaqGS:VSTA Earnings Per Share Growth July 1st 2021

Given this is a high-level overview, we won’t go into details of Vasta Platform's upcoming projects, though, bear in mind that generally 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 17% 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:

There are too many aspects of Vasta Platform to cover in one brief article, but the key fundamentals for the company can all be found in one place – Vasta Platform's company page on Simply Wall St. We've also compiled a list of key factors you should further research:

  1. Valuation: What is Vasta Platform 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 Vasta Platform 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 Vasta Platform’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. 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.
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Simply Wall St

Simply Wall St is focused on providing unbiased, high-quality research coverage on every listed company in the world. Our research team consists of data scientists and multiple equity analysts with over two decades worth of financial markets experience between them.