When Will AnteoTech Limited (ASX:ADO) Become Profitable?
We feel now is a pretty good time to analyse AnteoTech Limited's (ASX:ADO) business as it appears the company may be on the cusp of a considerable accomplishment. AnteoTech Limited engages in developing, commercializing, manufacturing, and distributing products for the life sciences research, vitro diagnostics, energy, and medical device markets primarily in Australia. The AU$355m market-cap company posted a loss in its most recent financial year of AU$3.1m and a latest trailing-twelve-month loss of AU$3.5m leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which AnteoTech 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.
View our latest analysis for AnteoTech
According to some industry analysts covering AnteoTech, breakeven is near. They anticipate the company to incur a final loss in 2021, before generating positive profits of AU$2.0m in 2022. 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 68% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving AnteoTech's growth isn’t the focus of this broad overview, though, take into account that by and large a life science 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 AnteoTech has no debt on its balance sheet, which is rare for a loss-making life science company, which usually has a high level of debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
Next Steps:
There are too many aspects of AnteoTech to cover in one brief article, but the key fundamentals for the company can all be found in one place – AnteoTech's company page on Simply Wall St. We've also put together a list of relevant aspects you should look at:
Historical Track Record: What has AnteoTech's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on AnteoTech'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.
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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