Clarivate Plc (NYSE:CLVT): Are Analysts Optimistic?

Clarivate Plc (NYSE:CLVT) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Clarivate Plc, an information, analytics, and workflow company, provides structured information and analytics for discovery, development, protection, commercialization, and measurement of scientific research, innovations, and brands. With the latest financial year loss of US$4.0b and a trailing-twelve-month loss of US$4.2b, the US$4.5b market-cap company amplified its loss by moving further away from its breakeven target. Many investors are wondering about the rate at which Clarivate will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

See our latest analysis for Clarivate

Consensus from 10 of the American Professional Services analysts is that Clarivate is on the verge of breakeven. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$40m in 2025. Therefore, the company is expected to breakeven roughly 2 years from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of -1.3%,

earnings-per-share-growth

Underlying developments driving Clarivate's growth isn’t the focus of this broad overview, but, bear in mind that typically a low or volatile growth rate in the near future is not unusual, especially if the company is currently in an investment period.

Before we wrap up, there’s one issue worth mentioning. Clarivate currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Clarivate's case is 70%. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of Clarivate to cover in one brief article, but the key fundamentals for the company can all be found in one place – Clarivate's company page on Simply Wall St. We've also put together a list of pertinent aspects you should look at:

1. Valuation: What is Clarivate 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 Clarivate is currently mispriced by the market.

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