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Kanzhun Limited (NASDAQ:BZ) About To Shift From Loss To Profit

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Kanzhun Limited (NASDAQ:BZ) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Kanzhun Limited operates an online recruitment platform, BOSS Zhipin, assists the recruitment process between job seekers and employers for enterprises and corporations in the People’s Republic of China. The company’s loss has recently broadened since it announced a CN¥1.2b loss in the full financial year, compared to the latest trailing-twelve-month loss of CN¥2.1b, moving it further away from breakeven. The most pressing concern for investors is Kanzhun'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.

Check out our latest analysis for Kanzhun

Kanzhun is bordering on breakeven, according to the 7 American Interactive Media and Services analysts. They expect the company to post a final loss in 2021, before turning a profit of CN¥1.1b in 2022. Therefore, the company is expected to breakeven roughly 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 116% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

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

Given this is a high-level overview, we won’t go into details of Kanzhun's upcoming projects, but, 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. Kanzhun 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. 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:

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

  1. Valuation: What is Kanzhun 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 Kanzhun 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 Kanzhun’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.