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When Will Bluechiip Limited (ASX:BCT) Turn A Profit?

Simply Wall St

Bluechiip Limited's (ASX:BCT): Bluechiip Limited develops and commercializes wireless tracking solutions for the healthcare and life science, security, defense, and manufacturing industries. The AU$88m market-cap company announced a latest loss of -AU$3.3m on 30 June 2019 for its most recent financial year result. As path to profitability is the topic on BCT’s investors mind, I’ve decided to gauge market sentiment. Below I will provide a high-level summary of the industry analysts’ expectations for BCT.

Check out our latest analysis for Bluechiip

Expectation from Electronic analysts is BCT is on the verge of breakeven. They anticipate the company to incur a final loss in 2021, before generating positive profits of AU$500k in 2022. BCT is therefore projected to breakeven around 3 years from today. In order to meet this breakeven date, I calculated the rate at which BCT must grow year-on-year. It turns out an average annual growth rate of 62% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

ASX:BCT Past and Future Earnings, September 13th 2019

I’m not going to go through company-specific developments for BCT given that this is a high-level summary, however, take into account that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before I wrap up, there’s one aspect worth mentioning. BCT currently has no debt on its balance sheet, which is quite unusual for a cash-burning loss-making, growth company, which usually has a high level of debt relative to its equity. BCT 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 key fundamentals of BCT which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at BCT, take a look at BCT’s company page on Simply Wall St. I’ve also put together a list of important factors you should further research:

  1. Historical Track Record: What has BCT'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.
  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Bluechiip’s board and the CEO’s back ground.
  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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.