Telefónica Deutschland Holding AG’s (FRA:O2D) Path To Profitability

Telefónica Deutschland Holding AG’s (FRA:O2D): Telefónica Deutschland Holding AG operates as a mobile communication provider to private and business customers in Germany. With the latest financial year loss of -€381.00m and a trailing-twelve month of -€364.00m, the €10.74b market-cap alleviates its loss by moving closer towards its target of breakeven. The most pressing concern for investors is O2D’s path to profitability – when will it breakeven? In this article, I will touch on the expectations for O2D’s growth and when analysts expect the company to become profitable.

Check out our latest analysis for Telefónica Deutschland Holding

Expectation from Telecom analysts is O2D is on the verge of breakeven. They anticipate the company to incur a final loss in 2019, before generating positive profits of €142.49m in 2020. So, O2D is predicted to breakeven approximately a few months from now. How fast will O2D have to grow each year in order to reach the breakeven point by 2020? Working backwards from analyst estimates, it turns out that they expect the company to grow 59.81% 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:O2D Past Future Earnings July 16th 18
DB:O2D Past Future Earnings July 16th 18

Given this is a high-level overview, I won’t go into details of O2D’s upcoming projects, however, 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.

One thing I’d like to point out is that O2D has managed its capital prudently, with debt making up 25.42% of equity. This means that O2D 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 key fundamentals of O2D which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at O2D, take a look at O2D’s company page on Simply Wall St. I’ve also put together a list of relevant factors you should look at:

  1. Valuation: What is O2D 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 O2D 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 Telefónica Deutschland Holding’s board and the CEO’s back ground.
  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.