Stock Analysis

Rubean AG's (FRA:R1B) Profit Outlook

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We feel now is a pretty good time to analyse Rubean AG's (FRA:R1B) business as it appears the company may be on the cusp of a considerable accomplishment. Rubean AG provides software-only point-of-sale solutions to banks, acquirers, and merchants. On 31 December 2021, the €17m market-cap company posted a loss of €1.8m for its most recent financial year. The most pressing concern for investors is Rubean's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

See our latest analysis for Rubean

According to some industry analysts covering Rubean, breakeven is near. They expect the company to post a final loss in 2022, before turning a profit of €900k in 2023. Therefore, the company is expected to breakeven just over a year from now. 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 89% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

DB:R1B Earnings Per Share Growth September 7th 2022

Underlying developments driving Rubean's growth isn’t the focus of this broad overview, however, bear in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we’d like to point out is that Rubean has no debt on its balance sheet, which is rare for a loss-making growth company, which typically has high debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Rubean, so if you are interested in understanding the company at a deeper level, take a look at Rubean's company page on Simply Wall St. We've also compiled a list of relevant aspects you should look at:

  1. Valuation: What is Rubean 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 Rubean 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 Rubean’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.

Valuation is complex, but we're helping make it simple.

Find out whether Rubean is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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