CleanBnB S.p.A.'s (BIT:CBB) Path To Profitability

Simply Wall St
May 13, 2022
Source: Shutterstock

CleanBnB S.p.A. (BIT:CBB) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. CleanBnB S.p.A. operates an integrated platform with the online channels of reservations for houses and apartments for holidays. On 31 December 2021, the €7.0m market-cap company posted a loss of €1.2m for its most recent financial year. Many investors are wondering about the rate at which CleanBnB will turn a profit, with the big question being “when will the company breakeven?” 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

Expectations from some of the Italian Real Estate analysts is that CleanBnB is on the verge of breakeven. They expect the company to post a final loss in 2022, before turning a profit of €100k in 2023. Therefore, the company is expected to breakeven just over a year from today. 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 102%, 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.

BIT:CBB Earnings Per Share Growth May 13th 2022

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

Before we wrap up, there’s one issue worth mentioning. CleanBnB currently has a debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk in 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 compiled a list of essential factors you should look at:

  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.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.