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Conifer Holdings, Inc. (NASDAQ:CNFR) Is Expected To Breakeven

Simply Wall St

Conifer Holdings, Inc.'s (NASDAQ:CNFR): Conifer Holdings, Inc., an insurance holding company, offers insurance coverage in specialty commercial and personal product lines. With the latest financial year loss of -US$9.2m and a trailing-twelve month of -US$11.9m, the US$35m market-cap amplifies its loss by moving further away from its breakeven target. Many investors are wondering the rate at which CNFR will turn a profit, with the big question being “when will the company breakeven?” In this article, I will touch on the expectations for CNFR’s growth and when analysts expect the company to become profitable.

See our latest analysis for Conifer Holdings

Consensus from the 3 Insurance analysts is CNFR is on the verge of breakeven. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$2.8m in 2021. Therefore, CNFR is expected to breakeven roughly 2 years from now. What rate will CNFR have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 106%, which signals high confidence from analysts. If this rate turns out to be too aggressive, CNFR may become profitable much later than analysts predict.

NasdaqGM:CNFR Past and Future Earnings, October 27th 2019
NasdaqGM:CNFR Past and Future Earnings, October 27th 2019

Underlying developments driving CNFR’s growth isn’t the focus of this broad overview, but, bear 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.

Before I wrap up, there’s one issue worth mentioning. CNFR currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in CNFR’s case is 75%. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

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

  1. Historical Track Record: What has CNFR's 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 Conifer Holdings’s board and the CEO’s back ground.

  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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.