Net Insight AB (publ)'s (STO:NETI B) About To Shift From Loss To Profit

We feel now is a pretty good time to analyse Net Insight AB (publ)'s (STO:NETI B) business as it appears the company may be on the cusp of a considerable accomplishment. Net Insight AB (publ) offers solutions that enable network operators and media companies for media service launches worldwide. On 31 December 2020, the kr984m market-cap company posted a loss of kr9.2m for its most recent financial year. The most pressing concern for investors is Net Insight's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

See our latest analysis for Net Insight

Net Insight is bordering on breakeven, according to some Swedish Communications analysts. They expect the company to post a final loss in 2020, before turning a profit of kr68m in 2021. Therefore, the company is expected to breakeven roughly a year from now or less! We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 24% is expected, 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 Net Insight's upcoming projects, but, take into account that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one aspect worth mentioning. Net Insight currently has no debt on its balance sheet, which is rare for a loss-making growth company, which usually has a high level of debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

This article is not intended to be a comprehensive analysis on Net Insight, so if you are interested in understanding the company at a deeper level, take a look at Net Insight's company page on Simply Wall St. We've also put together a list of essential factors you should further examine:

1. Valuation: What is Net Insight 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 Net Insight 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 Net Insight’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. 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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