Nvni Group Limited's (NASDAQ:NVNI) Shift From Loss To Profit

We feel now is a pretty good time to analyse Nvni Group Limited's (NASDAQ:NVNI) business as it appears the company may be on the cusp of a considerable accomplishment. Nvni Group Limited provides a business to business SaaS platform that offers cloud solutions. The US$52m market-cap company announced a latest loss of R$114m on 31 December 2022 for its most recent financial year result. As path to profitability is the topic on Nvni Group's investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

View our latest analysis for Nvni Group

According to some industry analysts covering Nvni Group, breakeven is near. They expect the company to post a final loss in 2024, before turning a profit of R$23m in 2025. So, the company is predicted to breakeven just over a year from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 87%, which is rather optimistic! 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 Nvni Group given that this is a high-level summary, however, take into account 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 would like to bring into light with Nvni Group is it currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. These losses tend to occur only on paper, however, in other cases it can be forewarning.

Next Steps:

This article is not intended to be a comprehensive analysis on Nvni Group, so if you are interested in understanding the company at a deeper level, take a look at Nvni Group's company page on Simply Wall St. We've also compiled a list of essential aspects you should further research:

1. Valuation: What is Nvni Group 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 Nvni Group 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 Nvni 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.