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Auction Technology Group plc (LON:ATG) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Auction Technology Group plc operates online auction marketplaces primarily in the United Kingdom, North America, and Germany. On 30 September 2022, the UK£779m market-cap company posted a loss of UK£6.1m for its most recent financial year. As path to profitability is the topic on Auction Technology Group's investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
Check out our latest analysis for Auction Technology Group
Auction Technology Group is bordering on breakeven, according to the 5 British Consumer Services analysts. They expect the company to post a final loss in 2022, before turning a profit of UK£6.8m in 2023. The company is therefore projected to breakeven around a year from now or less! At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 59%, 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 Auction Technology Group's growth isn’t the focus of this broad overview, however, bear in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 34% 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 Auction Technology Group, so if you are interested in understanding the company at a deeper level, take a look at Auction Technology Group's company page on Simply Wall St. We've also compiled a list of essential aspects you should look at:
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Valuation: What is Auction Technology Group 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 Auction Technology Group is currently mispriced by the market.
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Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Auction Technology Group’s board and the CEO’s background.
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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.