With the business potentially at an important milestone, we thought we'd take a closer look at Cian PLC's (NYSE:CIAN) future prospects. Cian PLC operates an online real estate classifieds platform in Russia. The company’s loss has recently broadened since it announced a ₽627m loss in the full financial year, compared to the latest trailing-twelve-month loss of ₽2.0b, moving it further away from breakeven. Many investors are wondering about the rate at which Cian will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.
According to the 7 industry analysts covering Cian, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2021, before generating positive profits of ₽296m in 2022. Therefore, the company is expected to breakeven roughly a year from now or less! At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 71%, 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 Cian's upcoming projects, however, bear in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing we would like to bring into light with Cian is it currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. Oftentimes, losses exist only on paper but other times, it can be a red flag.
Next Steps:
There are key fundamentals of Cian 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 Cian, take a look at Cian's company page on Simply Wall St. We've also compiled a list of relevant factors you should further research:
- Valuation: What is Cian 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 Cian 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 Cian’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.
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