Breakeven Is Near for Kahoot! ASA (OB:KAHOT)

By
Simply Wall St
Published
November 22, 2021
OB:KAHOT
Source: Shutterstock

We feel now is a pretty good time to analyse Kahoot! ASA's (OB:KAHOT) business as it appears the company may be on the cusp of a considerable accomplishment. Kahoot! ASA operates a game-based learning platform in the United States, Canada, Europe, the Asia Pacific, the Latin America and the Caribbean, Africa, the Middle East, and India. The kr25b market-cap company’s loss lessened since it announced a US$34m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$27m, as it approaches breakeven. Many investors are wondering about the rate at which Kahoot! will turn a profit, with the big question being “when will the company 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 Kahoot!

Kahoot! is bordering on breakeven, according to the 3 Norwegian Entertainment analysts. They expect the company to post a final loss in 2020, before turning a profit of US$8.3m in 2021. So, the company is predicted to breakeven approximately 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 70% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

earnings-per-share-growth
OB:KAHOT Earnings Per Share Growth November 23rd 2021

Given this is a high-level overview, we won’t go into details of Kahoot!'s upcoming projects, however, keep in mind that generally 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 Kahoot! has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which usually has a high level of debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Kahoot! 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 Kahoot!, take a look at Kahoot!'s company page on Simply Wall St. We've also compiled a list of important factors you should further examine:

  1. Valuation: What is Kahoot! 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 Kahoot! 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 Kahoot!’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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