Breakeven On The Horizon For MoneyGram International, Inc. (NASDAQ:MGI)

MoneyGram International, Inc. (NASDAQ:MGI) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. MoneyGram International, Inc., together with its subsidiaries, provides cross-border peer-to-peer payments and money transfer services in the United States and internationally. The US$583m market-cap company announced a latest loss of US$7.9m on 31 December 2020 for its most recent financial year result. Many investors are wondering about the rate at which MoneyGram International 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.

View our latest analysis for MoneyGram International

Consensus from 5 of the American IT analysts is that MoneyGram International is on the verge of breakeven. They expect the company to post a final loss in 2021, before turning a profit of US$10.0m in 2022. So, the company is predicted to breakeven just over a year from today. 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 70%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving MoneyGram International's growth isn’t the focus of this broad overview, though, bear in mind that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we would like to bring into light with MoneyGram International is it currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. These losses tend to occur only on paper, however, in other cases it can be forewarning.

Next Steps:

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

1. Valuation: What is MoneyGram International 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 MoneyGram International 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 MoneyGram International’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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