Analysts Are Optimistic We'll See A Profit From Yatsen Holding Limited (NYSE:YSG)

With the business potentially at an important milestone, we thought we'd take a closer look at Yatsen Holding Limited's (NYSE:YSG) future prospects. Yatsen Holding Limited, together with its subsidiaries, engages in the development and sale of beauty products under the Perfect Diary, Little Ondine, Pink Bear, Abby’s Choice, GalÃnic, DR.WU, Eve Lom, and EANTiM brands in the People’s Republic of China. The US$227m market-cap company announced a latest loss of CN¥748m on 31 December 2023 for its most recent financial year result. As path to profitability is the topic on Yatsen Holding'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.

See our latest analysis for Yatsen Holding

Yatsen Holding is bordering on breakeven, according to the 3 American Personal Products analysts. They anticipate the company to incur a final loss in 2023, before generating positive profits of CN¥283m in 2024. Therefore, the company is expected to breakeven roughly a year from now or less! How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 121% year-on-year, on average, 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 Yatsen Holding's upcoming projects, though, take into account 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. Yatsen Holding currently has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which usually has a high level of debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Yatsen Holding 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 Yatsen Holding, take a look at Yatsen Holding's company page on Simply Wall St. We've also compiled a list of important factors you should further examine:

1. Valuation: What is Yatsen Holding 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 Yatsen Holding 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 Yatsen Holding’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.