When will Kerlink SA (EPA:ALKLK) become profitable?

We think it’s a good time to analyze Kerlink SA (EPA:ALKLK) As it seems, the company may be on the verge of a huge achievement. Kerlink SA provides network infrastructure solutions for the Internet of Things (IoT) market to incumbent and alternative operators, enterprises and utilities worldwide. The 12 million euro market capitalization company recorded a loss of 1.8 million euros in its last financial year and a last loss of 2.1 million euros in the last twelve months, which has resulted in an even wider gap between the loss and the break-even point. Many investors wonder about the rate at which Kerlink will make a profit, with the big question being “when will the company break even?” Below, we’ll provide a high-level summary of industry analysts’ expectations for the company.

Discover our latest analysis for Kerlink

According to some industry analysts covering Kerlink, the break-even point is near. They expect the company to make a final loss in 2023, before making a profit of 1.3 million euros in 2024. Thus, the company should break even in about 2 years from of today. How fast will the business need to grow each year to break even by 2024? Working backwards from analysts’ estimates, it turns out that they expect the company to grow 107% year-over-year, on average, which is pretty optimistic! If this rate turns out to be too aggressive, the company could become profitable much later than analysts predict.

ENXTPA:ALKLK Earnings per share growth September 27, 2022

We are not going to review company-specific developments for Kerlink since this is a high-level summary, however, keep in mind that a high projected growth rate does not is generally not unusual for a company that is currently going through an investment period.

One thing we would like to highlight with Kerlink is its relatively high level of leverage. Generally, the rule of thumb is that debt should not exceed 40% of your equity, which in Kerlink’s case is 61%. Note that higher debt increases the risk of investing in the loss-making company.

Next steps:

There are fundamentals of Kerlink that are not covered in this article, but we must re-emphasize that this is just a basic overview. For a more complete overview of Kerlink, check out Kerlink’s company page on Simply Wall St. We’ve also compiled a list of key aspects you should consider in more detail:

  1. Evaluation: What is Kerlink worth today? Has future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize if Kerlink is currently being mispriced by the market.
  2. Management team: An experienced management team at the helm bolsters our confidence in the company – look at who sits on Kerlink’s board and the CEO’s background.
  3. Other High Performing Stocks: Are there other stocks that offer better prospects with a proven track record? Explore our free list of these great stocks here.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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