Brockhaus Capital Management AG (FRA:BKHT) On The Verge Of Breaking Even

With the business potentially at an important milestone, we thought we'd take a closer look at Brockhaus Capital Management AG's (FRA:BKHT) future prospects. Brockhaus Capital Management AG operates as a technology holding company that acquires and holds majority stakes in growth companies in the German speaking region. With the latest financial year loss of €3.8m and a trailing-twelve-month loss of €7.6m, the €285m market-cap company amplified its loss by moving further away from its breakeven target. The most pressing concern for investors is Brockhaus Capital Management'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 Brockhaus Capital Management

Consensus from 2 of the German Electronic analysts is that Brockhaus Capital Management is on the verge of breakeven. They anticipate the company to incur a final loss in 2020, before generating positive profits of €6.6m in 2021. So, the company is predicted to breakeven approximately a year from now or less! At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 118%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for Brockhaus Capital Management given that this is a high-level summary, but, take into account that generally 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 prudently, with debt making up 23% 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:

This article is not intended to be a comprehensive analysis on Brockhaus Capital Management, so if you are interested in understanding the company at a deeper level, take a look at Brockhaus Capital Management's company page on Simply Wall St. We've also put together a list of relevant factors you should further research:

1. Historical Track Record: What has Brockhaus Capital Management'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 Brockhaus Capital Management'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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