Analysts Expect Breakeven For CommScope Holding Company, Inc. (NASDAQ:COMM) Before Long –

With the business potentially at an important milestone, we thought we’d take a closer look at CommScope Holding Company, Inc.’s (NASDAQ:COMM) future prospects. CommScope Holding Company, Inc. provides infrastructure solutions for communications and entertainment networks. The US$1.9b market-cap company posted a loss in its most recent financial year of US$520m and a latest trailing-twelve-month loss of US$470m shrinking the gap between loss and breakeven. The most pressing concern for investors is CommScope Holding Company’s path to profitability – when will it breakeven? We’ve put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Check out our latest analysis for CommScope Holding Company

According to the 10 industry analysts covering CommScope Holding Company, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$275m in 2024. The company is therefore projected to breakeven around 2 years from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 102% 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.

Given this is a high-level overview, we won’t go into details of CommScope Holding Company’s upcoming projects, but, take into account that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one issue worth mentioning. CommScope Holding Company currently has a debt-to-equity ratio of over 2x. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

There are key fundamentals of CommScope Holding Company which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at CommScope Holding Company, take a look at CommScope Holding Company’s company page on Simply Wall St. We’ve also put together a list of pertinent aspects you should further research:

1. Valuation: What is CommScope Holding Company 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 CommScope Holding Company is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on CommScope Holding Company’s board and the CEO’s background.
3. 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.