With the business potentially at an important milestone, we thought we'd take a closer look at CentralNic Group Plc's (LON:CNIC) future prospects. CentralNic Group Plc provides domain name services worldwide. The UK£206m market-cap company posted a loss in its most recent financial year of US$8.4m and a latest trailing-twelve-month loss of US$8.5m leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which CentralNic Group will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for CentralNic Group

According to the 4 industry analysts covering CentralNic Group, 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 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 77%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won’t go into details of CentralNic Group's upcoming projects, but, take into account that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one issue worth mentioning. CentralNic Group currently has a debt-to-equity ratio of 102%. Typically, debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

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

1. Valuation: What is CentralNic 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 CentralNic 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 CentralNic 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.

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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