When Will Qt Group Oyj (HEL:QTCOM) Become Profitable?

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Qt Group Oyj’s (HEL:QTCOM): Qt Group Oyj, a technology company, develops, productizes, and licenses software development tools under commercial and open source licenses in Finland, Norway, Germany, the United States, Russia, China, Japan, and South Korea. The €226m market-cap company announced a latest loss of -€2.4m on 31 December 2018 for its most recent financial year result. The most pressing concern for investors is QTCOM’s path to profitability – when will it breakeven? I’ve put together a brief outline of industry analyst expectations for QTCOM, its year of breakeven and its implied growth rate.

View our latest analysis for Qt Group Oyj

QTCOM is bordering on breakeven, according to the 2 Software analysts. They expect the company to post a final loss in 2019, before turning a profit of €6.6m in 2020. So, QTCOM is predicted to breakeven approximately a couple of months from now! In order to meet this breakeven date, I calculated the rate at which QTCOM must grow year-on-year. It turns out an average annual growth rate of 64% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

HLSE:QTCOM Past Future Earnings February 19th 19
HLSE:QTCOM Past Future Earnings February 19th 19

I’m not going to go through company-specific developments for QTCOM given that this is a high-level summary, but, keep in mind that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before I wrap up, there’s one aspect worth mentioning. QTCOM has managed its capital judiciously, with debt making up 3.4% of equity. This means that QTCOM 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 too many aspects of QTCOM to cover in one brief article, but the key fundamentals for the company can all be found in one place – QTCOM’s company page on Simply Wall St. I’ve also put together a list of important factors you should further examine:

  1. Valuation: What is QTCOM 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 QTCOM 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 Qt Group Oyj’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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. On rare occasion, data errors may occur. Thank you for reading.