Yahoo Finance When Will Clarivate Plc (NYSE:CLVT) Become Profitable?
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 services and analytics company, provides structured information and analytics for discovery, protection, and commercialization of scientific research, innovations, and brands. With the latest financial year loss of US$312m and a trailing-twelve-month loss of US$4.5b, the US$5.4b 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?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
See our latest analysis for Clarivate
Clarivate is bordering on breakeven, according to the 8 American Professional Services analysts. They expect the company to post a final loss in 2023, before turning a profit of US$90m in 2024. So, the company is predicted to breakeven approximately 2 years 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 121% 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.
Underlying developments driving Clarivate's growth isn’t the focus of this broad overview, though, take into account that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing we would like to bring into light with Clarivate is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Clarivate's case is 90%. 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 compiled a list of important aspects you should further examine:
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.
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.
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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