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$245m market-cap company posted a loss in its most recent financial year of AU$4.8m and a latest trailing-twelve-month loss of AU$123m leading to an even wider gap between loss and breakeven. 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.
Consensus from 7 of the Australian Diversified Financial analysts is that EML Payments is on the verge of breakeven. They expect the company to post a final loss in 2024, before turning a profit of AU$4.9m in 2025. Therefore, the company is expected to breakeven roughly 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 54% 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 EML Payments' growth isn’t the focus of this broad overview, but, keep in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 27% 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.
There are key fundamentals of EML Payments 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 EML Payments, take a look at EML Payments' company page on Simply Wall St. We've also put together a list of relevant aspects you should further examine:
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.
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.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here