We feel now is a pretty good time to analyse Pointerra Limited's (ASX:3DP) business as it appears the company may be on the cusp of a considerable accomplishment. Pointerra Limited develops and commercializes an end-to-end data as a service solution for managing, visualizing, working in, analyzing, and sharing 3D datasets in the United States, Australia, and internationally. On 30 June 2020, the AU$349m market-cap company posted a loss of AU$2.5m for its most recent financial year. Many investors are wondering about the rate at which Pointerra will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
Expectations from some of the Australian Software analysts is that Pointerra is on the verge of breakeven. They anticipate the company to incur a final loss in 2021, before generating positive profits of AU$5.7m in 2022. Therefore, the company is expected to breakeven roughly 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 58% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Given this is a high-level overview, we won’t go into details of Pointerra's upcoming projects, but, keep in mind that generally 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 Pointerra 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. 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.
There are key fundamentals of Pointerra which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Pointerra, take a look at Pointerra's company page on Simply Wall St. We've also put together a list of essential factors you should look at:
Valuation: What is Pointerra 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 Pointerra 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 Pointerra’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. 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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