amalphi ag (FRA:AMI): Are Analysts Optimistic?

amalphi ag (FRA:AMI) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. amalphi ag, a manufacturer-independent specialist, provides multi-vendor warranty extensions for the professional IT users worldwide. The company’s loss has recently broadened since it announced a €574k loss in the full financial year, compared to the latest trailing-twelve-month loss of €899k, moving it further away from breakeven. The most pressing concern for investors is amalphi ag's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for amalphi ag

Expectations from some of the German IT analysts is that amalphi ag is on the verge of breakeven. They expect the company to post a final loss in 2022, before turning a profit of €2.6m in 2023. So, the company is predicted to breakeven approximately 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 63% 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 amalphi ag's upcoming projects, 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 amalphi ag is it currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. These losses tend to occur only on paper, however, in other cases it can be forewarning.

Next Steps:

There are too many aspects of amalphi ag to cover in one brief article, but the key fundamentals for the company can all be found in one place – amalphi ag's company page on Simply Wall St. We've also put together a list of essential aspects you should look at:

1. Valuation: What is amalphi ag 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 amalphi ag 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 amalphi ag’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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