Analysts Expect Nido Education Limited (ASX:NDO) To Breakeven Soon

We feel now is a pretty good time to analyse Nido Education Limited's (ASX:NDO) business as it appears the company may be on the cusp of a considerable accomplishment. Nido Education Limited owns, operates, and manages long day early childhood education and care centers under the Nido Early School brand name in Australia. The AU$199m market-cap company’s loss lessened since it announced a AU$18m loss in the full financial year, compared to the latest trailing-twelve-month loss of AU$11m, as it approaches breakeven. As path to profitability is the topic on Nido Education's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for Nido Education

According to the 3 industry analysts covering Nido Education, the consensus is that breakeven is near. They expect the company to post a final loss in 2023, before turning a profit of AU$17m in 2024. So, the company is predicted to breakeven approximately 12 months 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 64% 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.

We're not going to go through company-specific developments for Nido Education given that this is a high-level summary, though, take into account that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 3.9% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

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

1. Valuation: What is Nido Education 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 Nido Education 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 Nido Education’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.