Breakeven Is Near for ImExHS Limited (ASX:IME)
We feel now is a pretty good time to analyse ImExHS Limited's (ASX:IME) business as it appears the company may be on the cusp of a considerable accomplishment. ImExHS Limited operates as an imaging software as a service and ancillary service provider in Australia and internationally. With the latest financial year loss of AU$3.6m and a trailing-twelve-month loss of AU$4.0m, the AU$32m market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on ImExHS' investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
View our latest analysis for ImExHS
ImExHS is bordering on breakeven, according to some Australian Healthcare Services analysts. They expect the company to post a final loss in 2021, before turning a profit of AU$1.0m in 2022. The company is therefore projected to breakeven around a year from now or less! At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 108%, which is rather optimistic! 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 ImExHS' upcoming projects, however, take into account that typically a healthcare tech company has lumpy cash flows which are contingent on the product and stage of development the company is in. 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. The company has managed its capital judiciously, with debt making up 7.5% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
Next Steps:
There are too many aspects of ImExHS to cover in one brief article, but the key fundamentals for the company can all be found in one place – ImExHS' company page on Simply Wall St. We've also put together a list of relevant factors you should further examine:
Historical Track Record: What has ImExHS' 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 ImExHS' 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.
