Yahoo Finance Cornerstone FS plc (LON:CSFS): When Will It Breakeven?
Cornerstone FS plc (LON:CSFS) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Cornerstone FS plc provides international payment, currency risk management, and electronic account services using its proprietary cloud-based multicurrency payments platform. With the latest financial year loss of UK£5.6m and a trailing-twelve-month loss of UK£2.6m, the UK£8.0m market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which Cornerstone FS 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.
View our latest analysis for Cornerstone FS
According to some industry analysts covering Cornerstone FS, breakeven is near. They expect the company to post a final loss in 2023, before turning a profit of UK£510k in 2024. Therefore, the company is expected 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 120%, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Given this is a high-level overview, we won’t go into details of Cornerstone FS' upcoming projects, however, keep in mind that generally 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. Cornerstone FS currently has a debt-to-equity ratio of over 2x. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk in investing in the loss-making company.
Next Steps:
There are too many aspects of Cornerstone FS to cover in one brief article, but the key fundamentals for the company can all be found in one place – Cornerstone FS' company page on Simply Wall St. We've also compiled a list of essential factors you should further examine:
Historical Track Record: What has Cornerstone FS' performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Cornerstone FS' 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.
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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.
