Loss-Making Ardagh Group S.A. (NYSE:ARD) Set To Breakeven

We feel now is a pretty good time to analyse Ardagh Group S.A.'s (NYSE:ARD) business as it appears the company may be on the cusp of a considerable accomplishment. Ardagh Group S.A., together with its subsidiaries, manufactures and supplies rigid packaging solutions primarily for the food and beverage markets worldwide. With the latest financial year loss of US$284m and a trailing-twelve-month loss of US$163m, the US$4.2b market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which Ardagh Group will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

Check out our latest analysis for Ardagh Group

Ardagh Group is bordering on breakeven, according to the 5 American Packaging analysts. They anticipate the company to incur a final loss in 2019, before generating positive profits of US$110m in 2020. So, the company is predicted to breakeven approximately 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2020? Working backwards from analyst estimates, it turns out that they expect the company to grow 63% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Ardagh Group's growth isn’t the focus of this broad overview, though, keep 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.

Before we wrap up, there’s one issue worth mentioning. Ardagh Group currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. Oftentimes, losses exist only on paper but other times, it can be a red flag.

Next Steps:

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

1. Valuation: What is Ardagh Group 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 Ardagh Group 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 Ardagh 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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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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