HomeToGo SE (ETR:HTG): Is Breakeven Near?

We feel now is a pretty good time to analyse HomeToGo SE's (ETR:HTG) business as it appears the company may be on the cusp of a considerable accomplishment. HomeToGo SE operates a marketplace for vacation rentals that connects users searching for a place to stay in Luxembourg and internationally. On 31 December 2023, the €268m market-cap company posted a loss of €28m for its most recent financial year. As path to profitability is the topic on HomeToGo's investors mind, we've decided to gauge market sentiment. 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 HomeToGo

Consensus from 7 of the German Hospitality analysts is that HomeToGo is on the verge of breakeven. They anticipate the company to incur a final loss in 2025, before generating positive profits of €3.4m in 2026. 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 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 46% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

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Given this is a high-level overview, we won’t go into details of HomeToGo's upcoming projects, though, 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 we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 1.8% 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.

Next Steps:

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

1. Valuation: What is HomeToGo 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 HomeToGo 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 HomeToGo’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.