Breakeven Is Near for Fragbite Group AB (publ) (STO:FRAG)

Fragbite Group AB (publ) (STO:FRAG) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Fragbite Group AB (publ) develops, adapts, and publishes games and esports content for the GAMING, ESPORTS, and WEB3 markets in the Nordic region. With the latest financial year loss of kr53m and a trailing-twelve-month loss of kr70m, the kr140m market-cap company amplified its loss by moving further away from its breakeven target. Many investors are wondering about the rate at which Fragbite Group will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for Fragbite Group

Fragbite Group is bordering on breakeven, according to some Swedish Entertainment analysts. They anticipate the company to incur a final loss in 2023, before generating positive profits of kr1.7m in 2024. Therefore, the company is expected to breakeven roughly 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 123%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for Fragbite Group given that this is a high-level summary, though, keep in mind that by and large 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 The company has managed its capital prudently, with debt making up 19% 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 too many aspects of Fragbite Group to cover in one brief article, but the key fundamentals for the company can all be found in one place – Fragbite Group's company page on Simply Wall St. We've also put together a list of relevant aspects you should further examine:

1. Historical Track Record: What has Fragbite Group'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 Fragbite Group'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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com