Stock Analysis

Basic-Fit N.V. (AMS:BFIT) On The Verge Of Breaking Even

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Basic-Fit N.V. (AMS:BFIT) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Basic-Fit N.V., together with its subsidiaries, engages in the operation of fitness clubs. On 31 December 2022, the €2.3b market-cap company posted a loss of €3.7m for its most recent financial year. As path to profitability is the topic on Basic-Fit's investors mind, we've decided to gauge market sentiment. 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 Basic-Fit

Consensus from 6 of the Dutch Hospitality analysts is that Basic-Fit is on the verge of breakeven. They expect the company to post a final loss in 2022, before turning a profit of €76m in 2023. Therefore, the company is expected to breakeven roughly 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 53% year-on-year, on average, 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.

ENXTAM:BFIT Earnings Per Share Growth March 16th 2023

Given this is a high-level overview, we won’t go into details of Basic-Fit's upcoming projects, however, bear in mind that typically 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. Basic-Fit currently has a debt-to-equity ratio of 182%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. 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 too many aspects of Basic-Fit to cover in one brief article, but the key fundamentals for the company can all be found in one place – Basic-Fit's company page on Simply Wall St. We've also put together a list of relevant aspects you should further research:

  1. Valuation: What is Basic-Fit 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 Basic-Fit 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 Basic-Fit’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.

Valuation is complex, but we're helping make it simple.

Find out whether Basic-Fit is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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