COFIDE - Gruppo De Benedetti Sp.A.'s (BIT:COF) Path To Profitability

COFIDE - Gruppo De Benedetti Sp.A.'s (BIT:COF): COFIDE - Gruppo De Benedetti S.p.A., through its subsidiaries, operates in the media, automotive components, and healthcare sectors. The €379.64M market-cap company announced a latest loss of -€10.56M on 31 December 2017 for its most recent financial year result. Many investors are wondering the rate at which COF will turn a profit, with the big question being “when will the company breakeven?” In this article, I will touch on the expectations for COF’s growth and when analysts expect the company to become profitable.

According to the industry analysts covering COF, breakeven is near. They anticipate the company to incur a final loss in 2017, before generating positive profits of €64.04M in 2018. Therefore, COF is expected to breakeven roughly a few months from now. In order to meet this breakeven date, I calculated the rate at which COF must grow year-on-year. It turns out an average annual growth rate of 200.13% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, I won’t go into detail the detail of COF’s upcoming projects, though, take into account that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing I would like to bring into light with COF is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in COF’s case is 60.65%. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of COF which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at COF, take a look at COF’s company page on Simply Wall St. I’ve also compiled a list of key aspects you should further research:

1. Valuation: What is COF 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 COF 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 COFIDE - Gruppo De Benedetti’s board and the CEO’s back ground.
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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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.