Market Sentiment Around Loss-Making Claranova SE (EPA:CLA)

We feel now is a pretty good time to analyse Claranova SE's (EPA:CLA) business as it appears the company may be on the cusp of a considerable accomplishment. Claranova SE, a technology company, engages in personalized e-commerce, software publishing, and internet of things (IoT) management in France, the United States, the United Kingdom, Germany, other European countries, and internationally. The €122m market-cap company’s loss lessened since it announced a €11m loss in the full financial year, compared to the latest trailing-twelve-month loss of €3.0m, as it approaches breakeven. The most pressing concern for investors is Claranova'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.

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According to the 2 industry analysts covering Claranova, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2025, before generating positive profits of €20m in 2026. 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 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 59% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for Claranova given that this is a high-level summary, however, take into account that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Check out our latest analysis for Claranova

One thing we would like to bring into light with Claranova is it currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. Oftentimes, losses exist only on paper but other times, it can be a red flag.

Next Steps:

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

1. Valuation: What is Claranova 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 Claranova 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 Claranova’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.