JDC Group AG (ETR:A8A) Has Found A Path To Profitability

By
Simply Wall St
Published
July 24, 2021
XTRA:A8A
Source: Shutterstock

JDC Group AG (ETR:A8A) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. JDC Group AG, a financial services company, provides financial product intermediary and advisory services in Germany and Austria. The €196m market-cap company’s loss lessened since it announced a €1.2m loss in the full financial year, compared to the latest trailing-twelve-month loss of €647k, as it approaches breakeven. As path to profitability is the topic on JDC Group's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

View our latest analysis for JDC Group

JDC Group is bordering on breakeven, according to the 2 German Capital Markets analysts. They expect the company to post a final loss in 2020, before turning a profit of €1.2m in 2021. The company is therefore projected to breakeven around a year from now or less! We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 88% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

earnings-per-share-growth
XTRA:A8A Earnings Per Share Growth July 24th 2021

Underlying developments driving JDC Group's growth isn’t the focus of this broad overview, 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.

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 69%. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

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

  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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Simply Wall St is focused on providing unbiased, high-quality research coverage on every listed company in the world. Our research team consists of data scientists and multiple equity analysts with over two decades worth of financial markets experience between them.