With the business potentially at an important milestone, we thought we'd take a closer look at Vasta Platform Limited's (NASDAQ:VSTA) future prospects. Vasta Platform Limited provides educational printed and digital solutions to private schools operating in the K-12 education sector in Brazil. The US$183m market-cap company posted a loss in its most recent financial year of R$84m and a latest trailing-twelve-month loss of R$61m shrinking the gap between loss and breakeven. Many investors are wondering about the rate at which Vasta Platform will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
View our latest analysis for Vasta Platform
According to the 4 industry analysts covering Vasta Platform, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2024, before generating positive profits of R$59m in 2025. So, the company is predicted to breakeven approximately 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 123% 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.
Given this is a high-level overview, we won’t go into details of Vasta Platform's upcoming projects, however, take into account that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 24% 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.
Next Steps:
This article is not intended to be a comprehensive analysis on Vasta Platform, so if you are interested in understanding the company at a deeper level, take a look at Vasta Platform's company page on Simply Wall St. We've also compiled a list of relevant aspects you should further examine:
- Valuation: What is Vasta Platform 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 Vasta Platform 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 Vasta Platform’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.