Market Sentiment Around Loss-Making Centaur Media Plc (LON:CAU)

Simply Wall St
·3 min read

With the business potentially at an important milestone, we thought we'd take a closer look at Centaur Media Plc's (LON:CAU) future prospects. Centaur Media Plc provides business information and marketing solutions to professional and commercial markets in the United Kingdom, rest of Europe, North America, and internationally. The company’s loss has recently broadened since it announced a UK£8.0m loss in the full financial year, compared to the latest trailing-twelve-month loss of UK£18m, moving it further away from breakeven. The most pressing concern for investors is Centaur Media's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for Centaur Media

Consensus from 2 of the British Media analysts is that Centaur Media is on the verge of breakeven. They expect the company to post a final loss in 2021, before turning a profit of UK£2.4m in 2022. The company is therefore projected to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 98% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

earnings-per-share-growth
earnings-per-share-growth

Underlying developments driving Centaur Media's growth isn’t the focus of this broad overview, but, 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’d like to point out is that Centaur Media has no debt on its balance sheet, which is rare for a loss-making growth company, which usually has a high level of debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of Centaur Media to cover in one brief article, but the key fundamentals for the company can all be found in one place – Centaur Media's company page on Simply Wall St. We've also put together a list of important factors you should look at:

  1. Valuation: What is Centaur Media 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 Centaur Media 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 Centaur Media’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.

This article by Simply Wall St is general in nature. 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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