When Will XpresSpa Group, Inc. (NASDAQ:XSPA) Become Profitable?

By
Simply Wall St
Published
November 18, 2021
NasdaqCM:XSPA
Source: Shutterstock

We feel now is a pretty good time to analyse XpresSpa Group, Inc.'s (NASDAQ:XSPA) business as it appears the company may be on the cusp of a considerable accomplishment. XpresSpa Group, Inc., a health and wellness services company, provides spa services at airports. The US$158m market-cap company posted a loss in its most recent financial year of US$91m and a latest trailing-twelve-month loss of US$16m shrinking the gap between loss and breakeven. The most pressing concern for investors is XpresSpa Group's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

View our latest analysis for XpresSpa Group

Expectations from some of the American Consumer Services analysts is that XpresSpa Group is on the verge of breakeven. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$22m in 2022. 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 219% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

earnings-per-share-growth
NasdaqCM:XSPA Earnings Per Share Growth November 19th 2021

Underlying developments driving XpresSpa Group's growth isn’t the focus of this broad overview, however, bear in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 5.4% 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 key fundamentals of XpresSpa Group which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at XpresSpa Group, take a look at XpresSpa Group's company page on Simply Wall St. We've also compiled a list of important factors you should further examine:

  1. Historical Track Record: What has XpresSpa Group's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on XpresSpa Group'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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