We feel now is a pretty good time to analyse Ebiquity plc's (LON:EBQ) business as it appears the company may be on the cusp of a considerable accomplishment. Ebiquity plc, together with its subsidiaries, provides independent media and marketing consultancy worldwide. The UK£25m market-cap company announced a latest loss of UK£3.9m on 31 December 2020 for its most recent financial year result. Many investors are wondering about the rate at which Ebiquity 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.

See our latest analysis for Ebiquity

Ebiquity is bordering on breakeven, according to the 2 British Media analysts. They expect the company to post a final loss in 2020, before turning a profit of UK£652k in 2021. Therefore, the company is expected to breakeven roughly 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 136% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Ebiquity's growth isn’t the focus of this broad overview, 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 issue worth mentioning. Ebiquity currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Ebiquity's case is 64%. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

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

1. Valuation: What is Ebiquity 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 Ebiquity 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 Ebiquity’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.

This article by Simply Wall St is general in nature. 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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