Clarivate Plc (NYSE:CLVT): When Will It Breakeven?

With the business potentially at an important milestone, we thought we'd take a closer look at Clarivate Plc's (NYSE:CLVT) future prospects. Clarivate Plc operates as an information services provider in the Americas, the Middle East, Africa, Europe, and the Asia Pacific. On 31 December 2023, the US$4.7b market-cap company posted a loss of US$987m for its most recent financial year. The most pressing concern for investors is Clarivate's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

Check out our latest analysis for Clarivate

Clarivate is bordering on breakeven, according to the 10 American Professional Services analysts. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$24m in 2025. The company is therefore projected to breakeven just over a year 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 107%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

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We're not going to go through company-specific developments for Clarivate given that this is a high-level summary, but, take into account that by and large 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. Clarivate currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Clarivate's case is 78%. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Clarivate which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Clarivate, take a look at Clarivate's company page on Simply Wall St. We've also put together a list of relevant factors you should look at:

1. Valuation: What is Clarivate 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 Clarivate 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 Clarivate’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. 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.