We feel now is a pretty good time to analyse OVH Groupe S.A.’s (EPA:OVH) business as it appears the company may be on the cusp of a considerable accomplishment. OVH Groupe SAS provides public and private cloud, shared hosting, and dedicated server products and solutions worldwide. The €1.7b market-cap company announced a latest loss of €29m on 31 August 2022 for its most recent financial year result. Many investors are wondering about the rate at which OVH Groupe 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 10 industry analysts covering OVH Groupe, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2023, before generating positive profits of €297k in 2024. So, the company is predicted to breakeven just over a year from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 86%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
We’re not going to go through company-specific developments for OVH Groupe given that this is a high-level summary, but, take into account 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 would like to bring into light with OVH Groupe is its debt-to-equity ratio of 120%. Typically, debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. Note that a higher debt obligation increases the risk around investing in the loss-making company.
This article is not intended to be a comprehensive analysis on OVH Groupe, so if you are interested in understanding the company at a deeper level, take a look at OVH Groupe’s company page on Simply Wall St. We’ve also compiled a list of relevant aspects you should further examine:
- Historical Track Record: What has OVH Groupe’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 OVH Groupe’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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Find out whether OVH Groupe is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.
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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.