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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$178m market-cap company posted a loss in its most recent financial year of AU$2.2m and a latest trailing-twelve-month loss of AU$6.8m leading to an even wider gap between loss and breakeven. As path to profitability is the topic on Alcidion Group's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.
Alcidion Group is bordering on breakeven, according to some Australian Healthcare Services analysts. They anticipate the company to incur a final loss in 2022, before generating positive profits of AU$1.4m in 2023. Therefore, the company is expected to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 111% year-on-year, on average, 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 Alcidion Group's growth isn’t the focus of this broad overview, however, keep in mind that generally healthcare tech companies, depending on the stage of product development, have irregular periods of cash flow. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.
Before we wrap up, there’s one aspect worth mentioning. Alcidion Group currently has no debt on its balance sheet, which is quite unusual for a cash-burning healthcare tech company, which usually has a high level of 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.
There are too many aspects of Alcidion Group to cover in one brief article, but the key fundamentals for the company can all be found in one place – Alcidion Group's company page on Simply Wall St. We've also put together a list of relevant aspects 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.
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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.