With the business potentially at an important milestone, we thought we’d take a closer look at Auction Technology Group plc’s (LON:ATG) future prospects. Auction Technology Group plc operates marketplaces and a proprietary auction platform primarily in the United Kingdom, North America, and Germany. On 30 September 2021, the UK£1.1b market-cap company posted a loss of UK£30m for its most recent financial year. The most pressing concern for investors is Auction Technology Group’s path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.
According to the 3 industry analysts covering Auction Technology Group, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2021, before generating positive profits of UK£14m in 2022. Therefore, the company is expected to breakeven roughly a year from now or less! How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 126% 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 Auction Technology Group given that this is a high-level summary, but, bear in mind that generally 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 aspect worth mentioning. The company has managed its capital prudently, 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.
There are too many aspects of Auction Technology Group to cover in one brief article, but the key fundamentals for the company can all be found in one place – Auction Technology Group’s company page on Simply Wall St. We’ve also compiled a list of pertinent factors you should further research:
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.
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.
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.