CleanBnB S.p.A. (BIT:CBB): Is Breakeven Near?

With the business potentially at an important milestone, we thought we'd take a closer look at CleanBnB S.p.A.'s (BIT:CBB) future prospects. CleanBnB S.p.A. operates an integrated platform with the online channels of reservations for houses and apartments for holidays. The company’s loss has recently broadened since it announced a €1.5m loss in the full financial year, compared to the latest trailing-twelve-month loss of €2.5m, moving it further away from breakeven. As path to profitability is the topic on CleanBnB's 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.

Check out our latest analysis for CleanBnB

According to some industry analysts covering CleanBnB, breakeven is near. They expect the company to post a final loss in 2021, before turning a profit of €200k in 2022. The company is therefore projected to breakeven just over a year from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 81%, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving CleanBnB's growth isn’t the focus of this broad overview, 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.

Before we wrap up, there’s one issue worth mentioning. CleanBnB currently has a debt-to-equity ratio of 124%. Typically, debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of CleanBnB 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 CleanBnB, take a look at CleanBnB's company page on Simply Wall St. We've also put together a list of important aspects you should further research:

1. Historical Track Record: What has CleanBnB's 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 CleanBnB'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.

If you decide to trade CleanBnB, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

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