creditshelf Aktiengesellschaft’s (ETR:CSQ): creditshelf Aktiengesellschaft operates as an online SME financing company in Germany. The company’s loss has recently broadened since it announced a -€6.3m loss in the full financial year, compared to the latest trailing-twelve-month loss of -€8.3m, moving it further away from breakeven. Many investors are wondering the rate at which CSQ will turn a profit, with the big question being “when will the company breakeven?” I’ve put together a brief outline of industry analyst expectations for CSQ, its year of breakeven and its implied growth rate.
Consensus from the 2 Diversified Financial analysts is CSQ is on the verge of breakeven. They expect the company to post a final loss in 2021, before turning a profit of €1.3m in 2022. Therefore, CSQ is expected to breakeven roughly 2 years from today. 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 61%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
I’m not going to go through company-specific developments for CSQ given that this is a high-level summary, but, bear in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before I wrap up, there’s one aspect worth mentioning. CSQ has managed its capital judiciously, with debt making up 1.4% 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 relevant factors you should further research:
- 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.
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