When Can We Expect A Profit From windeln.de SE (ETR:WDL)?

We feel now is a pretty good time to analyse windeln.de SE's (ETR:WDL) business as it appears the company may be on the cusp of a considerable accomplishment. windeln.de SE, together with its subsidiaries, operates as an online retailer of baby, toddler, and children products in Germany, China, and other European countries. The €17m market-cap company posted a loss in its most recent financial year of €15m and a latest trailing-twelve-month loss of €9.9m shrinking the gap between loss and breakeven. The most pressing concern for investors is windeln.de's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

See our latest analysis for windeln.de

According to some industry analysts covering windeln.de, breakeven is near. They anticipate the company to incur a final loss in 2021, before generating positive profits of €2.2m in 2022. Therefore, the company is expected to breakeven roughly 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 90% 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.

Given this is a high-level overview, we won’t go into details of windeln.de's upcoming projects, though, keep 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.

Before we wrap up, there’s one aspect worth mentioning. windeln.de currently has no debt on its balance sheet, which is rare for a loss-making loss-making, growth company, which usually has a high level of debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

There are key fundamentals of windeln.de which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at windeln.de, take a look at windeln.de's company page on Simply Wall St. We've also compiled a list of pertinent factors you should further examine:

1. Valuation: What is windeln.de 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 windeln.de 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 windeln.de’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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