Loss-Making Serviceware SE (ETR:SJJ) Set To Breakeven

Serviceware SE (ETR:SJJ) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Serviceware SE provides a portfolio of software solutions for the digitalization and automation of service processes in Germany, Austria, Switzerland, and internationally. On 30 November 2020, the €156m market-cap company posted a loss of €1.6m for its most recent financial year. The most pressing concern for investors is Serviceware'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.

View our latest analysis for Serviceware

According to the 3 industry analysts covering Serviceware, the consensus is that breakeven is near. They expect the company to post a final loss in 2020, before turning a profit of €467k in 2021. So, the company is predicted to breakeven approximately 12 months 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 137% is expected, which signals high confidence from analysts. 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 Serviceware's upcoming projects, but, 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. The company has managed its capital judiciously, with debt making up 12% of equity. This means that it 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 Serviceware to cover in one brief article, but the key fundamentals for the company can all be found in one place – Serviceware's company page on Simply Wall St. We've also put together a list of key factors you should further examine:

1. Valuation: What is Serviceware 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 Serviceware 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 Serviceware’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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