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

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With the business potentially at an important milestone, we thought we'd take a closer look at Family Zone Cyber Safety Limited's (ASX:FZO) future prospects. Family Zone Cyber Safety Limited develops, markets, distributes, and sells cyber safety products and services in Australia, New Zealand, and the United States. The AU$550m market-cap company announced a latest loss of AU$23m on 30 June 2021 for its most recent financial year result. Many investors are wondering about the rate at which Family Zone Cyber Safety will turn a profit, with the big question being “when will the company breakeven?” 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

Family Zone Cyber Safety is bordering on breakeven, according to some Australian Software analysts. They anticipate the company to incur a final loss in 2023, before generating positive profits of AU$2.4m in 2024. So, the company is predicted to breakeven approximately 3 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 62% year-on-year, on average, which is extremely buoyant. 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

We're not going to go through company-specific developments for Family Zone Cyber Safety given that this is a high-level summary, but, take into account that generally 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. The company has managed its capital prudently, with debt making up 1.3% 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 relevant aspects you should look at:

  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.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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