Yahoo Finance Loss-Making EML Payments Limited (ASX:EML) Expected To Breakeven In The Medium-Term
With the business potentially at an important milestone, we thought we'd take a closer look at EML Payments Limited's (ASX:EML) future prospects. EML Payments Limited provides payment solutions platform in Australia, Europe, and North America. With the latest financial year loss of AU$285m and a trailing-twelve-month loss of AU$167m, the AU$418m market-cap company alleviated its loss by moving closer towards its target of breakeven. The most pressing concern for investors is EML Payments' 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.
See our latest analysis for EML Payments
Consensus from 6 of the Australian Diversified Financial analysts is that EML Payments is on the verge of breakeven. They anticipate the company to incur a final loss in 2024, before generating positive profits of AU$22m in 2025. Therefore, the company is expected to breakeven just over a year from today. 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 87% year-on-year, on average, which is rather optimistic! 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, 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 issue worth mentioning. EML Payments currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in EML Payments' case is 55%. Note that a higher debt obligation increases the risk around investing in the loss-making company.
Next Steps:
There are too many aspects of EML Payments to cover in one brief article, but the key fundamentals for the company can all be found in one place – EML Payments' company page on Simply Wall St. We've also put together a list of key factors you should look at:
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.
