OneConnect Financial Technology Co., Ltd. (NYSE:OCFT): Are Analysts Optimistic?

We feel now is a pretty good time to analyse OneConnect Financial Technology Co., Ltd.'s (NYSE:OCFT) business as it appears the company may be on the cusp of a considerable accomplishment. OneConnect Financial Technology Co., Ltd. On 31 December 2020, the US$7.8b market-cap company posted a loss of CN¥1.4b for its most recent financial year. As path to profitability is the topic on OneConnect Financial Technology'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.

Check out our latest analysis for OneConnect Financial Technology

Consensus from 7 of the American Software analysts is that OneConnect Financial Technology is on the verge of breakeven. They expect the company to post a final loss in 2022, before turning a profit of CN¥565m in 2023. Therefore, the company is expected to breakeven roughly 2 years from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 62% 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 OneConnect Financial Technology given that this is a high-level summary, but, bear in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one issue worth mentioning. OneConnect Financial Technology currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in OneConnect Financial Technology's case is 40%. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of OneConnect Financial Technology to cover in one brief article, but the key fundamentals for the company can all be found in one place – OneConnect Financial Technology's company page on Simply Wall St. We've also put together a list of important factors you should look at:

1. Valuation: What is OneConnect Financial Technology 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 OneConnect Financial Technology 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 OneConnect Financial Technology’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.

If you decide to trade OneConnect Financial Technology, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

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