With the business potentially at an important milestone, we thought we'd take a closer look at Frontier Digital Ventures Limited's (ASX:FDV) future prospects. Frontier Digital Ventures Limited is a private equity firm specializing in investing and developing online classifieds business in emerging markets. The AU$262m market-cap company announced a latest loss of AU$11m on 31 December 2022 for its most recent financial year result. As path to profitability is the topic on Frontier Digital Ventures' investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

View our latest analysis for Frontier Digital Ventures

According to the 3 industry analysts covering Frontier Digital Ventures, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2023, before generating positive profits of AU$12m in 2024. The company is therefore projected 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 103% 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 Frontier Digital Ventures' growth isn’t the focus of this broad overview, however, bear in mind that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 0.3% 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 too many aspects of Frontier Digital Ventures to cover in one brief article, but the key fundamentals for the company can all be found in one place – Frontier Digital Ventures' company page on Simply Wall St. We've also put together a list of essential factors you should further research:

1. Valuation: What is Frontier Digital Ventures 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 Frontier Digital Ventures 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 Frontier Digital Ventures’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.

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

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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