Liberty Global plc (NASDAQ:LBTY.A) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Liberty Global plc, together with its subsidiaries, provides broadband internet, video, fixed-line telephony, and mobile communications services to residential customers and businesses. The US$16b market-cap company announced a latest loss of US$1.6b on 31 December 2020 for its most recent financial year result. The most pressing concern for investors is Liberty Global'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 Liberty Global

According to the 11 industry analysts covering Liberty Global, the consensus is that breakeven is near. They expect the company to post a final loss in 2020, before turning a profit of US$887m in 2021. So, the company is predicted to breakeven approximately 12 months 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 57% is expected, which signals high confidence from analysts. 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 Liberty Global's upcoming projects, though, keep in mind 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. Liberty Global currently has a debt-to-equity ratio of 120%. 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 around investing in the loss-making company.

Next Steps:

There are key fundamentals of Liberty Global 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 Liberty Global, take a look at Liberty Global's company page on Simply Wall St. We've also compiled a list of essential aspects you should further research:

1. Valuation: What is Liberty Global 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 Liberty Global 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 Liberty Global’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.

This article by Simply Wall St is general in nature. 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.

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