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Family Zone Cyber Safety Limited's (ASX:FZO) Shift From Loss To Profit

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·3 min read
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Family Zone Cyber Safety Limited (ASX:FZO) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Family Zone Cyber Safety Limited markets, distributes, and sells cyber safety products and services in Australia, New Zealand, and the United States. The company’s loss has recently broadened since it announced a AU$22m loss in the full financial year, compared to the latest trailing-twelve-month loss of AU$44m, moving it further away from breakeven. As path to profitability is the topic on Family Zone Cyber Safety's investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

See our latest analysis for Family Zone Cyber Safety

Expectations from some of the Australian Software analysts is that Family Zone Cyber Safety is on the verge of breakeven. They expect the company to post a final loss in 2024, before turning a profit of AU$11m in 2025. Therefore, the company is expected to breakeven roughly 3 years 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 64% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
earnings-per-share-growth

Underlying developments driving Family Zone Cyber Safety's growth isn’t the focus of this broad overview, though, take into account that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 2.2% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Family Zone Cyber Safety which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Family Zone Cyber Safety, take a look at Family Zone Cyber Safety's company page on Simply Wall St. We've also put together a list of essential aspects you should further research:

  1. Valuation: What is Family Zone Cyber Safety 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 Family Zone Cyber Safety 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 Family Zone Cyber Safety’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.

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