Zaim Credit Systems Plc (LON:ZAIM): Is Breakeven Near?

Zaim Credit Systems Plc (LON:ZAIM) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Zaim Credit Systems Plc operates as a microcredit company in Russia. The UK£11m market-cap company posted a loss in its most recent financial year of UK£742k and a latest trailing-twelve-month loss of UK£1.5m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is Zaim Credit Systems' 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.

Check out our latest analysis for Zaim Credit Systems

Expectations from some of the British Diversified Financial analysts is that Zaim Credit Systems is on the verge of breakeven. They anticipate the company to incur a final loss in 2020, before generating positive profits of UK£2.7m in 2021. Therefore, the company is expected to breakeven just over a year from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 63% is expected, 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 Zaim Credit Systems' growth isn’t the focus of this broad overview, but, keep in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we would like to bring into light with Zaim Credit Systems is it currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. Oftentimes, losses exist only on paper but other times, it can be a red flag.

Next Steps:

There are key fundamentals of Zaim Credit Systems which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Zaim Credit Systems, take a look at Zaim Credit Systems' company page on Simply Wall St. We've also put together a list of pertinent factors you should look at:

1. Historical Track Record: What has Zaim Credit Systems' performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Zaim Credit Systems' 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. 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.
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