Breakeven On The Horizon For Huddlestock Fintech AS (OB:HUDL)

We feel now is a pretty good time to analyse Huddlestock Fintech AS' (OB:HUDL) business as it appears the company may be on the cusp of a considerable accomplishment. Huddlestock Fintech AS, a fintech company, develops and implements software as a service-solutions for custody banks, asset managers, and trading venues. With the latest financial year loss of kr20m and a trailing-twelve-month loss of kr27m, the kr301m market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on Huddlestock Fintech'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.

See our latest analysis for Huddlestock Fintech

According to some industry analysts covering Huddlestock Fintech, breakeven is near. They expect the company to post a final loss in 2023, before turning a profit of kr10m in 2024. The company is therefore projected to breakeven around 2 years 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 97%, 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.

Given this is a high-level overview, we won’t go into details of Huddlestock Fintech's upcoming projects, but, take into account that by and large 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 9.3% 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 Huddlestock Fintech 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 Huddlestock Fintech, take a look at Huddlestock Fintech's company page on Simply Wall St. We've also compiled a list of pertinent factors you should look at:

1. Historical Track Record: What has Huddlestock Fintech'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 Huddlestock Fintech'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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.