Analysts Expect Breakeven For Penneo A/S (CPH:PENNEO) Before Long

With the business potentially at an important milestone, we thought we'd take a closer look at Penneo A/S' (CPH:PENNEO) future prospects. Penneo A/S, a software-as-a-service company, provides an eco-system of automation solutions that digitizes companies’ workflows of customers onboarding, and signing and managing documents. With the latest financial year loss of kr.20m and a trailing-twelve-month loss of kr.29m, the kr.297m market-cap company amplified its loss by moving further away from its breakeven target. The most pressing concern for investors is Penneo'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 Penneo

According to some industry analysts covering Penneo, breakeven is near. They anticipate the company to incur a final loss in 2025, before generating positive profits of kr.4.1m in 2026. The company is therefore projected to breakeven around 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 61% 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 Penneo's upcoming projects, however, bear in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 16% 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 Penneo, so if you are interested in understanding the company at a deeper level, take a look at Penneo's company page on Simply Wall St. We've also compiled a list of essential factors you should further research:

1. Historical Track Record: What has Penneo'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 Penneo'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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.