With the business potentially at an important milestone, we thought we'd take a closer look at LINK Mobility Group Holding ASA's (OB:LINK) future prospects. LINK Mobility Group Holding ASA provides mobile communication services in Europe and internationally. The kr11b market-cap company announced a latest loss of kr328m on 31 December 2020 for its most recent financial year result. As path to profitability is the topic on LINK Mobility Group Holding'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 the 2 industry analysts covering LINK Mobility Group Holding, the consensus is that breakeven is near. They expect the company to post a final loss in 2020, before turning a profit of kr142m in 2021. So, the company is predicted to breakeven approximately a year 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 118%, which is rather optimistic! 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 LINK Mobility Group Holding'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.
Before we wrap up, there’s one issue worth mentioning. LINK Mobility Group Holding currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in LINK Mobility Group Holding's case is 49%. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.
This article is not intended to be a comprehensive analysis on LINK Mobility Group Holding, so if you are interested in understanding the company at a deeper level, take a look at LINK Mobility Group Holding's company page on Simply Wall St. We've also compiled a list of pertinent factors you should further examine:
- Valuation: What is LINK Mobility Group Holding 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 LINK Mobility Group Holding 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 LINK Mobility Group Holding’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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