We feel now is a pretty good time to analyse Snap One Holdings Corp.’s (NASDAQ:SNPO) business as it appears the company may be on the cusp of a considerable accomplishment. Snap One Holdings Corp. provides smart living solutions in the United States and internationally. The US$901m market-cap company’s loss lessened since it announced a US$36m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$33m, as it approaches breakeven. Many investors are wondering about the rate at which Snap One Holdings 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 Snap One Holdings
According to the 9 industry analysts covering Snap One Holdings, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$12m in 2022. So, the company is predicted to breakeven approximately a year from now or less! We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 53% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, we won’t go into details of Snap One Holdings’ upcoming projects, but, bear in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing we would like to bring into light with Snap One Holdings is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Snap One Holdings’ case is 65%. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.
There are key fundamentals of Snap One Holdings which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Snap One Holdings, take a look at Snap One Holdings’ company page on Simply Wall St. We’ve also put together a list of essential aspects you should look at:
- Valuation: What is Snap One Holdings 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 Snap One Holdings 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 Snap One Holdings’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.
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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.