Frontier Digital Ventures Limited’s (ASX:FDV): Frontier Digital Ventures Limited is a private equity firm specializing in investing in and developing online classifieds business. On 31 December 2017, the AU$138.49m market-cap posted a loss of -AU$13.54m for its most recent financial year. Many investors are wondering the rate at which FDV will turn a profit, with the big question being “when will the company breakeven?” Below I will provide a high-level summary of the industry analysts’ expectations for FDV.See our latest analysis for Frontier Digital Ventures
FDV is bordering on breakeven, according to Internet analysts. They anticipate the company to incur a final loss in 2019, before generating positive profits of AU$2.10m in 2020. FDV is therefore projected to breakeven around a few months from now. What rate will FDV 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 64.72%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, I won’t go into details of FDV’s upcoming projects, however, bear in mind that typically 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. FDV has managed its capital prudently, with debt making up 0.84% of equity. This means that FDV has predominantly funded its operations from equity capital,and its low debt obligation reduces the risk around investing in the loss-making company.
There are key fundamentals of FDV which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at FDV, take a look at FDV’s company page on Simply Wall St. I’ve also put together a list of essential aspects you should further research:
- Valuation: What is FDV 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 FDV is currently mispriced by the market.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Frontier Digital Ventures’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.