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creditshelf Aktiengesellschaft’s (ETR:CSQ): creditshelf Aktiengesellschaft operates an online credit marketplace lending platform for small- and medium-sized enterprises in Germany. The company’s loss has recently broadened since it announced a -€756.7k loss in the full financial year, compared to the latest trailing-twelve-month loss of -€2.4m, moving it further away from breakeven. The most pressing concern for investors is CSQ’s path to profitability – when will it breakeven? In this article, I will touch on the expectations for CSQ’s growth and when analysts expect the company to become profitable.
Expectation from Diversified Financial analysts is CSQ is on the verge of breakeven. They anticipate the company to incur a final loss in 2018, before generating positive profits of €200k in 2019. Therefore, CSQ is expected to breakeven roughly a few months from now. What rate will CSQ have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 126%, which is extremely buoyant. If this rate turns out to be too aggressive, CSQ may become profitable much later than analysts predict.
I’m not going to go through company-specific developments for CSQ given that this is a high-level summary, though, keep in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before I wrap up, there’s one aspect worth mentioning. CSQ has managed its capital judiciously, with debt making up 2.2% of equity. This means that CSQ has predominantly funded its operations from equity capital,and its low debt obligation reduces the risk around investing in the loss-making company.
This article is not intended to be a comprehensive analysis on CSQ, so if you are interested in understanding the company at a deeper level, take a look at CSQ’s company page on Simply Wall St. I’ve also put together a list of important factors you should further examine:
- Historical Track Record: What has CSQ’s performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on creditshelf’s board and the CEO’s back ground.
- 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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.