Yahoo Finance Nido Education Limited (ASX:NDO) Has Found A Path To Profitability
Nido Education Limited (ASX:NDO) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Nido Education Limited owns, operates, and manages long day early childhood education and care centers under the Nido Early School brand name in Australia. The AU$220m market-cap company announced a latest loss of AU$18m on 31 December 2023 for its most recent financial year result. As path to profitability is the topic on Nido Education's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
See our latest analysis for Nido Education
Nido Education is bordering on breakeven, according to the 3 Australian Consumer Services analysts. They expect the company to post a final loss in 2023, before turning a profit of AU$16m in 2024. The company is therefore projected to breakeven around 12 months from now or less. We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 71% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, we won’t go into details of Nido Education's upcoming projects, but, keep in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 26% 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 too many aspects of Nido Education to cover in one brief article, but the key fundamentals for the company can all be found in one place – Nido Education's company page on Simply Wall St. We've also put together a list of relevant factors you should look at:
Valuation: What is Nido Education 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 Nido Education 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 Nido Education’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.
