Analysts Are Optimistic We'll See A Profit From Chindata Group Holdings Limited (NASDAQ:CD)

With the business potentially at an important milestone, we thought we'd take a closer look at Chindata Group Holdings Limited's (NASDAQ:CD) future prospects. Chindata Group Holdings Limited provides carrier-neutral hyper scale data center solutions in China, India, and Southeast Asia markets. The US$6.0b market-cap company announced a latest loss of CN¥283m on 31 December 2020 for its most recent financial year result. Many investors are wondering about the rate at which Chindata Group 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 Chindata Group Holdings

Chindata Group Holdings is bordering on breakeven, according to the 7 American IT analysts. They expect the company to post a final loss in 2020, before turning a profit of CN¥16m in 2021. So, the company is predicted to breakeven approximately 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 53% 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.

We're not going to go through company-specific developments for Chindata Group Holdings given that this is a high-level summary, though, take into account that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we would like to bring into light with Chindata Group Holdings is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Chindata Group Holdings' case is 43%. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

There are key fundamentals of Chindata Group Holdings which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Chindata Group Holdings, take a look at Chindata Group Holdings' company page on Simply Wall St. We've also compiled a list of important factors you should further research:

1. Historical Track Record: What has Chindata Group 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 Chindata Group 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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