Analysts Expect Alcidion Group Limited (ASX:ALC) To Breakeven Soon
We feel now is a pretty good time to analyse Alcidion Group Limited's (ASX:ALC) business as it appears the company may be on the cusp of a considerable accomplishment. Alcidion Group Limited, together with its subsidiaries, engages in the development and licensing of healthcare software products in Australia, New Zealand, and the United Kingdom. The AU$197m market-cap company announced a latest loss of AU$4.4m on 30 June 2022 for its most recent financial year result. The most pressing concern for investors is Alcidion Group's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
View our latest analysis for Alcidion Group
Alcidion Group is bordering on breakeven, according to the 2 Australian Healthcare Services analysts. They expect the company to post a final loss in 2022, before turning a profit of AU$1.6m in 2023. Therefore, the company is expected to breakeven roughly a year from now or less! How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 71% year-on-year, on average, 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 Alcidion Group's upcoming projects, though, take into account that by and large a healthcare tech company has lumpy cash flows which are contingent on the product and stage of development the company is in. So, 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 Alcidion Group has no debt on its balance sheet, which is quite unusual for a cash-burning healthcare tech company, which typically has high debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on Alcidion Group, so if you are interested in understanding the company at a deeper level, take a look at Alcidion Group's company page on Simply Wall St. We've also compiled a list of pertinent factors you should further examine:
Valuation: What is Alcidion Group 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 Alcidion Group 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 Alcidion Group’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.
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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