Analysts Expect Breakeven For Plenti Group Limited (ASX:PLT) Before Long

We feel now is a pretty good time to analyse Plenti Group Limited's (ASX:PLT) business as it appears the company may be on the cusp of a considerable accomplishment. Plenti Group Limited engages in the fintech lending and investment business in Australia. On 31 March 2024, the AU$139m market-cap company posted a loss of AU$15m for its most recent financial year. Many investors are wondering about the rate at which Plenti Group will turn a profit, with the big question being “when will the company 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 Plenti Group

According to some industry analysts covering Plenti Group, breakeven is near. They expect the company to post a final loss in 2026, before turning a profit of AU$7.8m in 2027. So, the company is predicted to breakeven approximately 3 years from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 106% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth

Underlying developments driving Plenti Group's growth isn’t the focus of this broad overview, however, bear in mind that by and large 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. Plenti Group currently has a debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Plenti Group, so if you are interested in understanding the company at a deeper level, take a look at Plenti Group's company page on Simply Wall St. We've also compiled a list of pertinent factors you should further research:

1. Historical Track Record: What has Plenti Group's 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 Plenti Group's 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.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com