We feel now is a pretty good time to analyse Advantage Solutions Inc.'s (NASDAQ:ADV) business as it appears the company may be on the cusp of a considerable accomplishment. Advantage Solutions Inc. provides business solutions to consumer packaged goods companies and retailers in North America, Asia Pacific, and Europe. The US$534m market-cap company announced a latest loss of US$381m on 31 December 2024 for its most recent financial year result. As path to profitability is the topic on Advantage Solutions' investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

According to the 3 industry analysts covering Advantage Solutions, the consensus is that breakeven is near. They expect the company to post a final loss in 2026, before turning a profit of US$18m in 2027. 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 126% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Advantage Solutions' growth isn’t the focus of this broad overview, 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.

Check out our latest analysis for Advantage Solutions

Before we wrap up, there’s one issue worth mentioning. Advantage Solutions currently has a debt-to-equity ratio of over 2x. Typically, 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:

This article is not intended to be a comprehensive analysis on Advantage Solutions, so if you are interested in understanding the company at a deeper level, take a look at Advantage Solutions' company page on Simply Wall St. We've also put together a list of relevant factors you should look at:

1. Valuation: What is Advantage Solutions 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 Advantage Solutions 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 Advantage Solutions’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.

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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.