beaconsmind AG (EPA:MLBMD) Has Found A Path To Profitability

beaconsmind AG (EPA:MLBMD) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. beaconsmind AG offers technology and software solutions for location-based marketing in the areas of retail in Switzerland and internationally. The €29m market-cap company posted a loss in its most recent financial year of CHF4.3m and a latest trailing-twelve-month loss of CHF4.0m shrinking the gap between loss and breakeven. Many investors are wondering about the rate at which beaconsmind will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

beaconsmind is bordering on breakeven, according to the 2 French Software analysts. They expect the company to post a final loss in 2024, before turning a profit of CHF2.6m in 2025. The company is therefore projected to breakeven around 12 months from now or less. At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 82%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving beaconsmind's growth isn’t the focus of this broad overview, though, bear in mind that generally 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 beaconsmind

Before we wrap up, there’s one issue worth mentioning. beaconsmind currently has a debt-to-equity ratio of 121%. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

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

1. Valuation: What is beaconsmind 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 beaconsmind 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 beaconsmind’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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.