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With the company potentially at an important stage, we thought we’d take a closer look Toys”R”Us ANZ Limited (ASX: TOY) future prospects. Toys”R”Us ANZ Limited, together with its subsidiaries, is engaged in the distribution of toys and hobbies in Australia and New Zealand. The A$29 million market capitalization company announced a final loss of A$25 million on July 31, 2022 for its most recent financial year result. Many investors are wondering about the rate at which ToysRUs ANZ will turn a profit, with the big question being “when will the business break even?” Below, we’ll provide a high-level summary of industry analysts’ expectations for the company.

Check out our latest analysis for ToysRUs ANZ

According to the 3 industry analysts covering ToysRUs ANZ, the consensus is that the break-even point is near. They expect the business to make a final loss in 2024, before making a profit of A$200,000 in 2025. Therefore, the business is expected to break even in about 3 years. How fast will the business need to grow each year to break even by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 105% year-over-year, on average, which is extremely dynamic. If this rate turns out to be too aggressive, the company could become profitable much later than analysts predict.

ASX: TOY earnings per share growth November 24, 2022

Since this is a high-level preview, we won’t go into details of ToysRUs ANZ’s upcoming projects, however, keep in mind that a high growth rate is usually not not unusual, particularly when a business is in an investment period. .

One thing we would like to point out is that the company has managed its capital conservatively, with debt representing 29% of equity. This means that it has mainly financed its operations from equity and that its low indebtedness reduces the risk associated with investing in the loss-making company.

Next steps:

This article is not intended to be a full analysis on ToysRUs ANZ, so if you want to understand the business on a deeper level, take a look at ToysRUs ANZ company page on Simply Wall St. We have also compiled a list of key aspects that you should consider in more detail:

  1. Historical review: How has ToysRUs ANZ performed in the past? Go deeper into past track record analysis and take a look at free visual representations of our analysis to clarify more.
  2. Management team: An experienced management team at the helm boosts our confidence in the business – take a look at who sits on ToysRUs ANZ board and CEO experience.
  3. Other High Performing Stocks: Are there other stocks that offer better prospects with a proven track record? Discover our free list of these great stocks here.

Valuation is complex, but we help make it simple.

Find out if ToysRUs ANZ is potentially overvalued or undervalued by viewing our full analysis, which includes fair value estimates, risks and warnings, dividends, insider trading and financial health.

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.