S4 Capital plc (LON:SFOR) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. S4 Capital plc, together with its subsidiaries, operates as a digital advertising and marketing services company in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company’s loss has recently broadened since it announced a UK£57m loss in the full financial year, compared to the latest trailing-twelve-month loss of UK£116m, moving it further away from breakeven. Many investors are wondering about the rate at which S4 Capital will turn a profit, with the big question being “when will the company 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 S4 Capital

S4 Capital is bordering on breakeven, according to the 8 British Media analysts. They anticipate the company to incur a final loss in 2023, before generating positive profits of UK£29m in 2024. The company is therefore projected to breakeven just over a year from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 100% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of S4 Capital's upcoming projects, but, take into account that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 36% 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:

This article is not intended to be a comprehensive analysis on S4 Capital, so if you are interested in understanding the company at a deeper level, take a look at S4 Capital's company page on Simply Wall St. We've also put together a list of essential factors you should look at:

1. Valuation: What is S4 Capital 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 S4 Capital 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 S4 Capital’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.

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