Formula One Group (NASDAQ:FWON.K) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Formula One Group engages in the motorsports business in the United States and internationally. The US$14b market-cap company’s loss lessened since it announced a US$190m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$179m, as it approaches breakeven. As path to profitability is the topic on Formula One Group's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.
According to the 11 industry analysts covering Formula One Group, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$58m in 2022. Therefore, the company is expected to breakeven roughly 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 59% is expected, 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 Formula One Group given that this is a high-level summary, but, take into account that generally 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 Formula One Group is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Formula One Group's case is 54%. Note that a higher debt obligation increases the risk around investing in the loss-making company.
There are too many aspects of Formula One Group to cover in one brief article, but the key fundamentals for the company can all be found in one place – Formula One Group's company page on Simply Wall St. We've also compiled a list of essential factors you should further research:
Valuation: What is Formula One Group 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 Formula One Group 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 Formula One Group’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.