Next Games Oyj (HEL:NXTGMS): When Will It Breakeven?

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 €78m market-cap company posted a loss in its most recent financial year of €8.3m and a latest trailing-twelve-month loss of €6.1m shrinking the gap between loss and breakeven. The most pressing concern for investors is Next Games Oyj's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for Next Games Oyj

Next Games Oyj is bordering on breakeven, according to the 4 Finnish Entertainment analysts. They anticipate the company to incur a final loss in 2021, before generating positive profits of €1.5m in 2022. The company is therefore projected to breakeven just over a year from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 87%, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for Next Games Oyj given that this is a high-level summary, though, bear in mind that typically 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 The company has managed its capital prudently, 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:

This article is not intended to be a comprehensive analysis on Next Games Oyj, so if you are interested in understanding the company at a deeper level, take a look at Next Games Oyj's company page on Simply Wall St. We've also compiled 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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