Loss-Making Conifer Holdings, Inc. (NASDAQ:CNFR) Expected To Breakeven In The Medium-Term

Conifer Holdings, Inc. (NASDAQ:CNFR) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Conifer Holdings, Inc., an insurance holding company, offers insurance coverage in specialty commercial and personal product lines. With the latest financial year loss of US$7.8m and a trailing-twelve-month loss of US$5.7m, the US$23m market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which Conifer Holdings 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.

See our latest analysis for Conifer Holdings

According to the 3 industry analysts covering Conifer Holdings, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$2.3m in 2022. So, the company is predicted to breakeven approximately 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 108% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Conifer Holdings' growth isn’t the focus of this broad overview, 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.

One thing we would like to bring into light with Conifer Holdings is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Conifer Holdings' case is 96%. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of Conifer Holdings to cover in one brief article, but the key fundamentals for the company can all be found in one place – Conifer Holdings' company page on Simply Wall St. We've also compiled a list of relevant aspects you should look at:

1. Historical Track Record: What has Conifer Holdings' 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 Conifer Holdings' 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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