Breakeven On The Horizon For 11880 Solutions AG (ETR:TGT)

11880 Solutions AG’s (ETR:TGT): 11880 Solutions AG, together with its subsidiaries, provides telephone directory assistance services to private and business customers. With the latest financial year loss of -€9.63m and a trailing-twelve month of -€9.36m, the €20.31m market-cap alleviates its loss by moving closer towards its target of breakeven. The most pressing concern for investors is TGT’s path to profitability – when will it breakeven? I’ve put together a brief outline of industry analyst expectations for TGT, its year of breakeven and its implied growth rate.

Check out our latest analysis for 11880 Solutions

Expectation from Commercial Services analysts is TGT is on the verge of breakeven. They expect the company to post a final loss in 2019, before turning a profit of €2.22m in 2020. TGT is therefore projected to breakeven around a few months from now. What rate will TGT 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 99.77%, which is extremely buoyant. If this rate turns out to be too aggressive, TGT may become profitable much later than analysts predict.

XTRA:TGT Past Future Earnings July 3rd 18
XTRA:TGT Past Future Earnings July 3rd 18

I’m not going to go through company-specific developments for TGT given that this is a high-level summary, but, bear in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing I’d like to point out is that TGT has no debt on its balance sheet, which is rare for a loss-making loss-making, growth company, which usually has a high level of debt relative to its equity. TGT currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

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

  1. Valuation: What is TGT 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 TGT 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 11880 Solutions’s board and the CEO’s back ground.
  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.