When Will MoneyGram International, Inc. (NASDAQ:MGI) Breakeven?

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. With the latest financial year loss of US$60m and a trailing-twelve-month loss of US$27m, the US$423m market-cap company alleviated its loss by moving closer towards its target of breakeven. The most pressing concern for investors is MoneyGram International's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for MoneyGram International

MoneyGram International is bordering on breakeven, according to the 5 American IT analysts. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$13m in 2021. Therefore, the company is expected to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 107% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving MoneyGram International's growth isn’t the focus of this broad overview, but, keep in mind that typically 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. MoneyGram International 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. Oftentimes, losses exist only on paper but other times, it can be a red flag.

Next Steps:

This article is not intended to be a comprehensive analysis on MoneyGram International, so if you are interested in understanding the company at a deeper level, take a look at MoneyGram International's company page on Simply Wall St. We've also put together a list of essential aspects you should further examine:

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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