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SIGNA Sports United N.V. (NYSE:SSU): Is Breakeven Near?

We feel now is a pretty good time to analyse SIGNA Sports United N.V.'s (NYSE:SSU) business as it appears the company may be on the cusp of a considerable accomplishment. SIGNA Sports United N.V. operates online sports web shops in the European Union, Switzerland, Norway, the United Kingdom, and the United States. The US$1.6b market-cap company posted a loss in its most recent financial year of €46m and a latest trailing-twelve-month loss of €275m leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which SIGNA Sports United will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for SIGNA Sports United

According to the 3 industry analysts covering SIGNA Sports United, the consensus is that breakeven is near. They expect the company to post a final loss in 2024, before turning a profit of €48m 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 75% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
earnings-per-share-growth

We're not going to go through company-specific developments for SIGNA Sports United given that this is a high-level summary, however, keep in mind that generally 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 judiciously, with debt making up 31% 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 key fundamentals of SIGNA Sports United 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 SIGNA Sports United, take a look at SIGNA Sports United's company page on Simply Wall St. We've also compiled a list of key factors you should further research:

  1. Valuation: What is SIGNA Sports United 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 SIGNA Sports United 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 SIGNA Sports United’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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