Breakeven On The Horizon For Beyond Frames Entertainment AB (publ) (FRA:8WP)

With the business potentially at an important milestone, we thought we’d take a closer look at Beyond Frames Entertainment AB (publ)’s (FRA:8WP) future prospects. Beyond Frames Entertainment AB (publ), a video game company, engages in the game creation and publishing business in Sweden. The €21m market-cap company posted a loss in its most recent financial year of kr7.6m and a latest trailing-twelve-month loss of kr13m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is Beyond Frames Entertainment’s path to profitability – when will it 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 Beyond Frames Entertainment

Consensus from 2 of the German Entertainment analysts is that Beyond Frames Entertainment is on the verge of breakeven. They anticipate the company to incur a final loss in 2024, before generating positive profits of kr5.0m in 2025. Therefore, the company is expected to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 112% year-on-year, on average, which is extremely buoyant. 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 Beyond Frames Entertainment’s upcoming projects, 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’d like to point out is that Beyond Frames Entertainment has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which typically has high debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of Beyond Frames Entertainment to cover in one brief article, but the key fundamentals for the company can all be found in one place – Beyond Frames Entertainment’s company page on Simply Wall St. We’ve also compiled a list of relevant factors you should further research:

1. Valuation: What is Beyond Frames Entertainment 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 Beyond Frames Entertainment 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 Beyond Frames Entertainment’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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.