We feel now is a pretty good time to analyse The Artisanal Spirits Company plc's (LON:ART) business as it appears the company may be on the cusp of a considerable accomplishment. The Artisanal Spirits Company plc curates and sells premium single cask scotch malt whisky and other spirits to its members in the United Kingdom and internationally. The UK£49m market-cap company posted a loss in its most recent financial year of UK£3.7m and a latest trailing-twelve-month loss of UK£4.0m leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which Artisanal Spirits 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.

Check out our latest analysis for Artisanal Spirits

Consensus from 2 of the British Beverage analysts is that Artisanal Spirits is on the verge of breakeven. They expect the company to post a final loss in 2023, before turning a profit of UK£673k in 2024. Therefore, the company is expected 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 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 83% 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.

Given this is a high-level overview, we won’t go into details of Artisanal Spirits' upcoming projects, but, bear in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one issue worth mentioning. Artisanal Spirits currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Artisanal Spirits' case is 56%. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

There are key fundamentals of Artisanal Spirits 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 Artisanal Spirits, take a look at Artisanal Spirits' company page on Simply Wall St. We've also put together a list of essential factors you should look at:

1. Historical Track Record: What has Artisanal Spirits' performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.

2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Artisanal Spirits' 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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