NFON AG (ETR:NFN) On The Verge Of Breaking Even

NFON AG (ETR:NFN) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. NFON AG provides cloud-based telecommunication services to business customers in Germany, Austria, Italy, the United Kingdom, Spain, Italy, France, Poland, and Portugal. With the latest financial year loss of €802k and a trailing-twelve-month loss of €288k, the €99m market-cap company alleviated its loss by moving closer towards its target of breakeven. As path to profitability is the topic on NFON's 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.

View our latest analysis for NFON

According to the 3 industry analysts covering NFON, the consensus is that breakeven is near. They expect the company to post a final loss in 2023, before turning a profit of €2.1m in 2024. The company is therefore projected to breakeven around a year from now or less! How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 76% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth

Underlying developments driving NFON's growth isn’t the focus of this broad overview, however, keep in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one aspect worth mentioning. NFON currently has no debt on its balance sheet, which is rare for a loss-making growth company, which typically has high debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of NFON to cover in one brief article, but the key fundamentals for the company can all be found in one place – NFON's company page on Simply Wall St. We've also compiled a list of relevant aspects you should further research:

1. Valuation: What is NFON 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 NFON 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 NFON’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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com