When Will Wellness and Beauty Solutions Limited (ASX:WNB) Become Profitable?
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Wellness and Beauty Solutions Limited's (ASX:WNB): Wellness and Beauty Solutions Limited provides non-invasive and non-surgical cosmetic treatments in Australia. With the latest financial year loss of -AU$11.7m and a trailing-twelve month of -AU$15.2m, the AU$4.9m market-cap amplifies its loss by moving further away from its breakeven target. Many investors are wondering the rate at which WNB will turn a profit, with the big question being “when will the company breakeven?” I’ve put together a brief outline of industry analyst expectations for WNB, its year of breakeven and its implied growth rate.
View our latest analysis for Wellness and Beauty Solutions
Expectation from Consumer Services analysts is WNB is on the verge of breakeven. They anticipate the company to incur a final loss in 2020, before generating positive profits of AU$1.4m in 2021. Therefore, WNB is expected to breakeven roughly 2 years from today. In order to meet this breakeven date, I calculated the rate at which WNB must grow year-on-year. It turns out an average annual growth rate of 73% is expected, which is rather optimistic! If this rate turns out to be too aggressive, WNB may become profitable much later than analysts predict.
Given this is a high-level overview, I won’t go into details of WNB’s upcoming projects, but, keep in mind that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before I wrap up, there’s one aspect worth mentioning. WNB has managed its capital judiciously, with debt making up 36% of equity. This means that WNB has predominantly funded its operations from equity capital,and its low debt obligation reduces the risk around investing in the loss-making company.
Next Steps:
There are too many aspects of WNB to cover in one brief article, but the key fundamentals for the company can all be found in one place – WNB’s company page on Simply Wall St. I’ve also compiled a list of relevant aspects you should look at:
Historical Track Record: What has WNB'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 Wellness and Beauty Solutions’s board and the CEO’s back ground.
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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If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
