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KnowBe4, Inc. (NASDAQ:KNBE) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. KnowBe4, Inc. engages in the development, marketing, and sale of its Software-as-a-Service-based security awareness platform. With the latest financial year loss of US$12m and a trailing-twelve-month loss of US$13m, the US$3.1b market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on KnowBe4's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.
KnowBe4 is bordering on breakeven, according to the 13 American Software analysts. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$4.8m in 2023. So, the company is predicted 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 is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving KnowBe4's growth isn’t the focus of this broad overview, but, keep in mind that typically 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 usually has a high level of 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.
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 compiled a list of relevant aspects you should further examine:
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.