Breakeven Is Near for JDC Group AG (ETR:A8A)

We feel now is a pretty good time to analyse JDC Group AG's (ETR:A8A) business as it appears the company may be on the cusp of a considerable accomplishment. JDC Group AG, through its subsidiaries, operates as a financial services company primarily in Germany and Austria. The company’s loss has recently broadened since it announced a €1.8m loss in the full financial year, compared to the latest trailing-twelve-month loss of €2.0m, moving it further away from breakeven. Many investors are wondering about the rate at which JDC Group will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for JDC Group

Consensus from 3 of the German Capital Markets analysts is that JDC Group is on the verge of breakeven. They anticipate the company to incur a final loss in 2020, before generating positive profits of €2.2m in 2021. 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 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 80% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving JDC Group's growth isn’t the focus of this broad overview, though, keep in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we would like to bring into light with JDC Group is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in JDC Group's case is 70%. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

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

1. Historical Track Record: What has JDC Group'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.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on JDC Group'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.

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This article by Simply Wall St is general in nature. 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.
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