Breakeven On The Horizon For Mad Paws Holdings Limited (ASX:MPA)

With the business potentially at an important milestone, we thought we'd take a closer look at Mad Paws Holdings Limited's (ASX:MPA) future prospects. Mad Paws Holdings Limited operates a pet care services online marketplace in Australia. The AU$45m market-cap company posted a loss in its most recent financial year of AU$12m and a latest trailing-twelve-month loss of AU$10m shrinking the gap between loss and breakeven. As path to profitability is the topic on Mad Paws Holdings' 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.

See our latest analysis for Mad Paws Holdings

Consensus from 2 of the Australian Online Retail analysts is that Mad Paws Holdings is on the verge of breakeven. They expect the company to post a final loss in 2023, before turning a profit of AU$1.4m in 2024. Therefore, the company is expected to breakeven roughly 2 years 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 78%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth

Given this is a high-level overview, we won’t go into details of Mad Paws Holdings' upcoming projects, but, 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 aspect worth mentioning. The company has managed its capital judiciously, with debt making up 0.004% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

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

1. Valuation: What is Mad Paws Holdings 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 Mad Paws Holdings 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 Mad Paws Holdings’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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.