Breakeven On The Horizon For Next Games Oyj (HEL:NXTGMS)

Simply Wall St
February 25, 2022
Source: Shutterstock

Next Games Oyj (HEL:NXTGMS) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Next Games Oyj develops and publishes mobile games in North America, Finland, rest of Europe, and internationally. The company’s loss has recently broadened since it announced a €3.9m loss in the full financial year, compared to the latest trailing-twelve-month loss of €4.1m, moving it further away from breakeven. The most pressing concern for investors is Next Games Oyj'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.

View our latest analysis for Next Games Oyj

According to the 2 industry analysts covering Next Games Oyj, the consensus is that breakeven is near. They expect the company to post a final loss in 2022, before turning a profit of €951k in 2023. So, the company is predicted to breakeven just over a year 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 90% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

HLSE:NXTGMS Earnings Per Share Growth February 25th 2022

Underlying developments driving Next Games Oyj's growth isn’t the focus of this broad overview, but, keep 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 2.8% 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:

There are key fundamentals of Next Games Oyj which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Next Games Oyj, take a look at Next Games Oyj's company page on Simply Wall St. We've also put together a list of important factors you should further examine:

  1. Valuation: What is Next Games Oyj 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 Next Games Oyj 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 Next Games Oyj’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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