Breakeven Is Near for Devsisters corporation (KOSDAQ:194480)

We feel now is a pretty good time to analyse Devsisters corporation's (KOSDAQ:194480) business as it appears the company may be on the cusp of a considerable accomplishment. Devsisters corporation develops mobile games in South Korea and internationally. The ₩1.2t market-cap company’s loss lessened since it announced a ₩13b loss in the full financial year, compared to the latest trailing-twelve-month loss of ₩11b, as it approaches breakeven. The most pressing concern for investors is Devsisters' path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for Devsisters

Expectations from some of the South Korean Entertainment analysts is that Devsisters is on the verge of breakeven. They expect the company to post a final loss in 2020, before turning a profit of ₩129b in 2021. The company is therefore projected to breakeven around 12 months from now or less. We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 45% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for Devsisters given that this is a high-level summary, though, bear in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 0.2% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

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

1. Valuation: What is Devsisters 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 Devsisters 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 Devsisters’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. 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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