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XP Factory Plc (LON:XPF) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. XP Factory Plc provides live escape-the-room experiences in the United Kingdom and internationally. On 31 March 2024, the UK£19m market-cap company posted a loss of UK£336k for its most recent financial year. As path to profitability is the topic on XP Factory's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.
Expectations from some of the British Hospitality analysts is that XP Factory is on the verge of breakeven. They anticipate the company to incur a final loss in 2025, before generating positive profits of UK£100k in 2026. So, the company is predicted to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 83% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
We're not going to go through company-specific developments for XP Factory given that this is a high-level summary, though, take into account that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Check out our latest analysis for XP Factory
Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 15% 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 XP Factory 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 XP Factory, take a look at XP Factory's company page on Simply Wall St. We've also put together a list of relevant factors you should look at:
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Valuation: What is XP Factory 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 XP Factory 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 XP Factory’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.