House of Control Group AS (OB:HOC) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. House Of Control Group AS develops and sells software as a service (SaaS) solutions within the areas of finance and accounting in Norway, Sweden, Denmark, and internationally. On 31 December 2020, the kr1.5b market-cap company posted a loss of kr26m for its most recent financial year. As path to profitability is the topic on House of Control Group's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
According to some industry analysts covering House of Control Group, breakeven is near. They expect the company to post a final loss in 2021, before turning a profit of kr11m in 2022. So, the company is predicted to breakeven just over a year from now. 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 103%, 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.
We're not going to go through company-specific developments for House of Control Group given that this is a high-level summary, but, keep in mind that generally 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 aspect worth mentioning. The company has managed its capital judiciously, with debt making up 26% 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.
There are too many aspects of House of Control Group to cover in one brief article, but the key fundamentals for the company can all be found in one place – House of Control Group's company page on Simply Wall St. We've also compiled a list of pertinent aspects you should further research:
- Valuation: What is House of Control Group 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 House of Control Group is currently mispriced by the market.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on House of Control Group’s board and the CEO’s background.
- 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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