We feel now is a pretty good time to analyse Toys"R"Us ANZ Limited's (ASX:TOY) business as it appears the company may be on the cusp of a considerable accomplishment. Toys"R"Us ANZ Limited, together with its subsidiaries, engages in distribution of toys and hobbies in Australia and New Zealand. The AU$21m market-cap company announced a latest loss of AU$25m on 31 July 2022 for its most recent financial year result. The most pressing concern for investors is ToysRUs ANZ's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
ToysRUs ANZ is bordering on breakeven, according to the 3 Australian Retail Distributors analysts. They anticipate the company to incur a final loss in 2024, before generating positive profits of AU$200k in 2025. The company is therefore projected to breakeven around 3 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 105% year-on-year, on average, 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.
Given this is a high-level overview, we won’t go into details of ToysRUs ANZ's upcoming projects, though, bear in mind that by and large 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 The company has managed its capital prudently, with debt making up 29% 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.
There are too many aspects of ToysRUs ANZ to cover in one brief article, but the key fundamentals for the company can all be found in one place – ToysRUs ANZ's company page on Simply Wall St. We've also compiled a list of pertinent factors you should further examine:
Historical Track Record: What has ToysRUs ANZ'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 ToysRUs ANZ'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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