We feel now is a pretty good time to analyse The Gym Group plc's (LON:GYM) business as it appears the company may be on the cusp of a considerable accomplishment. The Gym Group plc, together with its subsidiaries, operates a network of gym facilities under the Gym Group brand name in the United Kingdom. The UK￡240m market-cap company announced a latest loss of UK￡8.4m on 31 December 2023 for its most recent financial year result. The most pressing concern for investors is Gym Group's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for Gym Group

According to the 8 industry analysts covering Gym Group, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2024, before generating positive profits of UK￡1.6m in 2025. The company is therefore projected to breakeven just over a year 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 110% 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.

Underlying developments driving Gym Group's growth isn’t the focus of this broad overview, though, bear in mind 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 Gym Group is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Gym Group's case is 46%. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Gym Group, so if you are interested in understanding the company at a deeper level, take a look at Gym Group's company page on Simply Wall St. We've also compiled a list of relevant aspects you should further examine:

1. Valuation: What is Gym 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 Gym Group 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 Gym Group’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.