WALLIX GROUP SA (EPA:ALLIX) Could Be Less Than A Year Away From Profitability

With the business potentially at an important milestone, we thought we'd take a closer look at WALLIX GROUP SA's (EPA:ALLIX) future prospects. WALLIX GROUP SA publishes and provides cybersecurity software solutions worldwide. The €87m market-cap company posted a loss in its most recent financial year of €8.5m and a latest trailing-twelve-month loss of €8.7m leading to an even wider gap between loss and breakeven. As path to profitability is the topic on WALLIX GROUP's investors mind, we've decided to gauge market sentiment. 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 WALLIX GROUP

WALLIX GROUP is bordering on breakeven, according to the 2 French Software analysts. They anticipate the company to incur a final loss in 2024, before generating positive profits of €150k in 2025. Therefore, the company is expected to breakeven roughly 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 116% year-on-year, on average, 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.

Underlying developments driving WALLIX GROUP's growth isn’t the focus of this broad overview, however, bear in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we would like to bring into light with WALLIX GROUP is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in WALLIX GROUP's case is 91%. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on WALLIX GROUP, so if you are interested in understanding the company at a deeper level, take a look at WALLIX GROUP's company page on Simply Wall St. We've also put together a list of important aspects you should further examine:

1. Valuation: What is WALLIX GROUP 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 WALLIX GROUP 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 WALLIX GROUP’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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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.