Frontier Digital Ventures Limited (ASX:FDV): Are Analysts Optimistic?

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$145.13M market-cap posted a loss of -AU$13.54M for its most recent financial year. As path to profitability is the topic on FDV’s investors mind, I’ve decided to gauge market sentiment. I’ve put together a brief outline of industry analyst expectations for FDV, its year of breakeven and its implied growth rate.

According to the industry analysts covering FDV, breakeven is near. They expect the company to post a final loss in 2019, before turning a profit of AU$2.10M in 2020. So, FDV is predicted to breakeven approximately 2 years from now. In order to meet this breakeven date, I calculated the rate at which FDV must grow year-on-year. It turns out an average annual growth rate of 64.72% is expected, 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 detail the detail of FDV’s upcoming projects, though, bear in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing I’d like to point out is that FDV has managed its capital judiciously, 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.

Next Steps:

There are too many aspects of FDV to cover in one brief article, but the key fundamentals for the company can all be found in one place – FDV’s company page on Simply Wall St. I’ve also compiled a list of important aspects you should further research:

1. 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.
2. 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.
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.

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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.