When Will The Western Union Company (NYSE:WU) Breakeven?

The Western Union Company's (NYSE:WU): The Western Union Company provides money movement and payment services worldwide. The US$9.20B market-cap company announced a latest loss of -US$557.10M on 31 December 2017 for its most recent financial year result. Many investors are wondering the rate at which WU will turn a profit, with the big question being “when will the company breakeven?” I’ve put together a brief outline of industry analyst expectations for WU, its year of breakeven and its implied growth rate.

WU is bordering on breakeven, according to analysts. They anticipate the company to incur a final loss in 2017, before generating positive profits of US$835.80M in 2018. WU is therefore projected to breakeven around a few months from now. What rate will WU have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 80.77%, which is rather optimistic! If this rate turns out to be too aggressive, WU may become profitable much later than analysts predict.

Underlying developments driving WU’s growth isn’t the focus of this broad overview, though, take into account that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before I wrap up, there’s one issue worth mentioning. WU 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. These losses tend to occur only on paper, however, in other cases it can be forewarning.

Next Steps:

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

1. Valuation: What is WU 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 WU 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 Western Union’s board and the CEO’s back ground.
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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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.