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We feel now is a pretty good time to analyse Tuniu Corporation's (NASDAQ:TOUR) business as it appears the company may be on the cusp of a considerable accomplishment. Tuniu Corporation operates as an online leisure travel company in China. The US$103m market-cap company posted a loss in its most recent financial year of CN¥99m and a latest trailing-twelve-month loss of CN¥36m shrinking the gap between loss and breakeven. The most pressing concern for investors is Tuniu's 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.
View our latest analysis for Tuniu
Tuniu is bordering on breakeven, according to some American Hospitality analysts. They anticipate the company to incur a final loss in 2023, before generating positive profits of CN¥112m in 2024. 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 58%, which signals high confidence from analysts. 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 Tuniu's upcoming projects, however, bear in mind 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 judiciously, with debt making up 0.003% 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 too many aspects of Tuniu to cover in one brief article, but the key fundamentals for the company can all be found in one place – Tuniu's company page on Simply Wall St. We've also compiled a list of essential aspects you should further research:
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Valuation: What is Tuniu 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 Tuniu 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 Tuniu’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.
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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.