Reinet Investments S.C.A.'s (BDL:REINI) Has Found A Path To Profitability

We feel now is a pretty good time to analyse Reinet Investments S.C.A.'s (BDL:REINI) business as it appears the company may be on the cusp of a considerable accomplishment. Reinet Investments S.C.A. operates as a securitization vehicle in Luxembourg. The €3.0b market-cap company’s loss lessened since it announced a €335m loss in the full financial year, compared to the latest trailing-twelve-month loss of €159m, as it approaches breakeven. The most pressing concern for investors is Reinet Investments S.C.A's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Check out our latest analysis for Reinet Investments S.C.A

Reinet Investments S.C.A is bordering on breakeven, according to some Capital Markets analysts. They expect the company to post a final loss in 2020, before turning a profit of €371m in 2021. So, the company is predicted to breakeven approximately 12 months from now or less. At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 60%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Reinet Investments S.C.A's growth isn’t the focus of this broad overview, though, keep in mind 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 The company has managed its capital judiciously, with debt making up 0.04% 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:

This article is not intended to be a comprehensive analysis on Reinet Investments S.C.A, so if you are interested in understanding the company at a deeper level, take a look at Reinet Investments S.C.A's company page on Simply Wall St. We've also compiled a list of pertinent aspects you should further examine:

1. Historical Track Record: What has Reinet Investments S.C.A'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 Reinet Investments S.C.A'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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