Breakeven On The Horizon For Parlem Telecom Companyia de Telecomunicacions, S.A. (BME:PAR)
With the business potentially at an important milestone, we thought we'd take a closer look at Parlem Telecom Companyia de Telecomunicacions, S.A.'s (BME:PAR) future prospects. Parlem Telecom Companyia de Telecomunicacions, S.A. With the latest financial year loss of €3.5m and a trailing-twelve-month loss of €1.9m, the €56m market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which Parlem Telecom Companyia de Telecomunicacions 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.
According to the 2 industry analysts covering Parlem Telecom Companyia de Telecomunicacions, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2026, before generating positive profits of €1.0m in 2027. The company is therefore projected to breakeven around 2 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 95% is expected, 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.
We're not going to go through company-specific developments for Parlem Telecom Companyia de Telecomunicacions given that this is a high-level summary, however, 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.
See our latest analysis for Parlem Telecom Companyia de Telecomunicacions
One thing we would like to bring into light with Parlem Telecom Companyia de Telecomunicacions is its debt-to-equity ratio of over 2x. Generally, the rule of thumb is 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 Parlem Telecom Companyia de Telecomunicacions, so if you are interested in understanding the company at a deeper level, take a look at Parlem Telecom Companyia de Telecomunicacions' company page on Simply Wall St. We've also compiled a list of key factors you should further research:
- Valuation: What is Parlem Telecom Companyia de Telecomunicacions 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 Parlem Telecom Companyia de Telecomunicacions 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 Parlem Telecom Companyia de Telecomunicacions’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.