Cornerstone FS plc (LON:CSFS) On The Verge Of Breaking Even

With the business potentially at an important milestone, we thought we'd take a closer look at Cornerstone FS plc's (LON:CSFS) future prospects. 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£17m 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?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

See our latest analysis for Cornerstone FS

Cornerstone FS is bordering on breakeven, according to some British Diversified Financial analysts. They expect the company to post a final loss in 2023, before turning a profit of UK£798k in 2024. So, the company is predicted to breakeven approximately 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 73% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

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We're not going to go through company-specific developments for Cornerstone FS given that this is a high-level summary, however, keep in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we would like to bring into light with Cornerstone FS is its debt-to-equity ratio of over 2x. 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 around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Cornerstone FS, so if you are interested in understanding the company at a deeper level, take a look at Cornerstone FS' company page on Simply Wall St. We've also compiled a list of relevant aspects you should further research:

1. 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.

2. 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.

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.

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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.