We feel now is a pretty good time to analyse KnowBe4, Inc.'s (NASDAQ:KNBE) business as it appears the company may be on the cusp of a considerable accomplishment. KnowBe4, Inc. engages in the development of security awareness training and simulated phishing platform. The US$3.6b market-cap company posted a loss in its most recent financial year of US$2.4m and a latest trailing-twelve-month loss of US$16m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is KnowBe4's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
According to the 12 industry analysts covering KnowBe4, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$11m in 2023. The company is therefore projected to breakeven just over a year from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 115% is expected, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
We're not going to go through company-specific developments for KnowBe4 given that this is a high-level summary, though, take into account that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before we wrap up, there’s one aspect worth mentioning. KnowBe4 currently 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.
This article is not intended to be a comprehensive analysis on KnowBe4, so if you are interested in understanding the company at a deeper level, take a look at KnowBe4's company page on Simply Wall St. We've also put together a list of important aspects you should further research:
Valuation: What is KnowBe4 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 KnowBe4 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 KnowBe4’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.
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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.