We feel now is a pretty good time to analyse SIGNA Sports United N.V.'s (NYSE:SSU) business as it appears the company may be on the cusp of a considerable accomplishment. SIGNA Sports United N.V. operates online sports web shops in the European Union, Switzerland, Norway, the United Kingdom, and the United States. The company’s loss has recently broadened since it announced a €46m loss in the full financial year, compared to the latest trailing-twelve-month loss of €210m, moving it further away from breakeven. As path to profitability is the topic on SIGNA Sports United's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
According to the 2 industry analysts covering SIGNA Sports United, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2022, before generating positive profits of €9.4m in 2023. So, the company is predicted 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 69%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, we won’t go into details of SIGNA Sports United's upcoming projects, though, bear in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing we’d like to point out is that SIGNA Sports United has no debt on its balance sheet, which is rare for a loss-making growth company, which typically has high debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
This article is not intended to be a comprehensive analysis on SIGNA Sports United, so if you are interested in understanding the company at a deeper level, take a look at SIGNA Sports United's company page on Simply Wall St. We've also compiled a list of pertinent aspects you should look at:
- Valuation: What is SIGNA Sports United 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 SIGNA Sports United is currently mispriced by the market.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on SIGNA Sports United’s board and the CEO’s background.
- 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.