Yahoo Finance Analysts Expect EML Payments Limited (ASX:EML) To Breakeven Soon
EML Payments Limited (ASX:EML) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. EML Payments Limited provides payment solutions platform in Australia, Europe, and North America. The AU$408m market-cap company announced a latest loss of AU$285m on 30 June 2023 for its most recent financial year result. As path to profitability is the topic on EML Payments' investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.
Check out our latest analysis for EML Payments
According to the 6 industry analysts covering EML Payments, the consensus is that breakeven is near. They expect the company to post a final loss in 2023, before turning a profit of AU$27m in 2024. Therefore, the company is expected to breakeven roughly 12 months from now or less. At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 108%, 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 EML Payments' upcoming projects, however, keep in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before we wrap up, there’s one issue worth mentioning. EML Payments currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in EML Payments' case is 53%. Note that a higher debt obligation increases the risk around investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on EML Payments, so if you are interested in understanding the company at a deeper level, take a look at EML Payments' company page on Simply Wall St. We've also compiled a list of relevant aspects you should further research:
Historical Track Record: What has EML Payments' performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on EML Payments' 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.
