Yahoo Finance Metro Bank PLC's (LON:MTRO) Shift From Loss To Profit
Metro Bank PLC (LON:MTRO) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Metro Bank PLC, together with its subsidiaries, provides retail and commercial banking services in the United Kingdom. The UK£246m market-cap company posted a loss in its most recent financial year of UK£248m and a latest trailing-twelve-month loss of UK£169m shrinking the gap between loss and breakeven. Many investors are wondering about the rate at which Metro Bank will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.
Check out our latest analysis for Metro Bank
According to the 5 industry analysts covering Metro Bank, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2023, before generating positive profits of UK£14m in 2024. Therefore, the company is expected to breakeven just over a year from today. 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 78%, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Underlying developments driving Metro Bank'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. Metro Bank currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Metro Bank's case is 78%. Note that a higher debt obligation increases the risk around investing in the loss-making company.
Next Steps:
There are too many aspects of Metro Bank to cover in one brief article, but the key fundamentals for the company can all be found in one place – Metro Bank's company page on Simply Wall St. We've also put together a list of important factors you should further research:
Historical Track Record: What has Metro Bank'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.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Metro Bank'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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