Loss-Making Conduit Holdings Limited (LON:CRE) Set To Breakeven

With the business potentially at an important milestone, we thought we'd take a closer look at Conduit Holdings Limited's (LON:CRE) future prospects. Conduit Holdings Limited, together with its subsidiaries, engages in the reinsurance business in the United States, Europe, and internationally. The UK£786m market-cap company announced a latest loss of US$90m on 31 December 2022 for its most recent financial year result. As path to profitability is the topic on Conduit Holdings' investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

View our latest analysis for Conduit Holdings

Conduit Holdings is bordering on breakeven, according to the 5 British Insurance analysts. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$128m in 2023. 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 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 39% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Conduit Holdings' growth isn’t the focus of this broad overview, however, take into account that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we’d like to point out is that Conduit Holdings has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which usually has a high level of debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of Conduit Holdings to cover in one brief article, but the key fundamentals for the company can all be found in one place – Conduit Holdings' company page on Simply Wall St. We've also compiled a list of relevant aspects you should look at:

1. Valuation: What is Conduit Holdings 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 Conduit Holdings 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 Conduit Holdings’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.