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Market Sentiment Around Loss-Making WALLIX GROUP SA (EPA:ALLIX)

Simply Wall St

WALLIX GROUP SA's (EPA:ALLIX): WALLIX GROUP SA, a software company, provides cyber security solutions worldwide. The company’s loss has recently broadened since it announced a -€3.3m loss in the full financial year, compared to the latest trailing-twelve-month loss of -€5.2m, moving it further away from breakeven. As path to profitability is the topic on ALLIX’s investors mind, I’ve decided to gauge market sentiment. I’ve put together a brief outline of industry analyst expectations for ALLIX, its year of breakeven and its implied growth rate.

See our latest analysis for WALLIX GROUP

Consensus from the 2 Software analysts is ALLIX is on the verge of breakeven. They anticipate the company to incur a final loss in 2020, before generating positive profits of €2.4m in 2021. ALLIX is therefore projected to breakeven around a few months from now. What rate will ALLIX 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 101%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

ENXTPA:ALLIX Past and Future Earnings, January 16th 2020

I’m not going to go through company-specific developments for ALLIX given that this is a high-level summary, but, keep in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing I’d like to point out is that ALLIX has managed its capital judiciously, with debt making up 3.9% of equity. This means that ALLIX 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 ALLIX which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at ALLIX, take a look at ALLIX’s company page on Simply Wall St. I’ve also put together a list of key aspects you should further examine:

  1. Valuation: What is ALLIX 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 ALLIX 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 WALLIX GROUP’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.

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.

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