Pantaflix AG's (ETR:PAL): Pantaflix AG, a media company, engages in the production and development of theatrical feature films. The €31m market-cap posted a loss in its most recent financial year of -€8.9m and a latest trailing-twelve-month loss of -€10.8m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is PAL’s path to profitability – when will it breakeven? I’ve put together a brief outline of industry analyst expectations for PAL, its year of breakeven and its implied growth rate.
PAL is bordering on breakeven, according to the 4 Entertainment analysts. They expect the company to post a final loss in 2021, before turning a profit of €6.5m in 2022. So, PAL is predicted to breakeven approximately 3 years from now. What rate will PAL have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 63%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving PAL’s growth isn’t the focus of this broad overview, but, 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 I wrap up, there’s one aspect worth mentioning. PAL has managed its capital judiciously, with debt making up 36% of equity. This means that PAL 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 key fundamentals of PAL which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at PAL, take a look at PAL’s company page on Simply Wall St. I’ve also compiled a list of important factors you should further examine:
- Valuation: What is PAL 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 PAL 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 Pantaflix’s board and the CEO’s back ground.
- 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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