In This Article:
Conduit Holdings Limited (LON:CRE) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Conduit Holdings Limited, together with its subsidiaries, engages in the reinsurance business in the United States, Europe, and internationally. On 31 December 2022, the UK£791m market-cap company posted a loss of US$90m for its most recent financial year. Many investors are wondering about the rate at which Conduit 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 Conduit Holdings
Consensus from 6 of the British Insurance analysts is that Conduit Holdings is on the verge of breakeven. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$127m in 2023. So, the company is predicted to breakeven approximately 12 months from now or less. At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 41%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving Conduit Holdings' growth isn’t the focus of this broad overview, but, take into account that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing we’d like to point out is that Conduit Holdings has no debt on its balance sheet, which is rare for a loss-making growth company, which typically has high debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
Next Steps:
This article is not intended to be a comprehensive analysis on Conduit Holdings, so if you are interested in understanding the company at a deeper level, take a look at Conduit Holdings' company page on Simply Wall St. We've also compiled a list of essential aspects you should look at:
-
Valuation: What is Conduit Holdings 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 Conduit Holdings is currently mispriced by the market.
-
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Conduit Holdings’s board and the CEO’s background.
-
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.