With the business potentially at an important milestone, we thought we'd take a closer look at Catapult Group International Limited's (ASX:CAT) future prospects. Catapult Group International Limited develops and sells wearable tracking solutions and analytics. On 30 June 2020, the AU$415m market-cap company posted a loss of AU$7.7m for its most recent financial year. The most pressing concern for investors is Catapult Group International's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
According to the 4 industry analysts covering Catapult Group International, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2021, before generating positive profits of AU$2.1m in 2022. Therefore, the company is expected to breakeven roughly 2 years from now. 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 57% is expected, which is extremely buoyant. 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 Catapult Group International's upcoming projects, but, bear in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 6.2% 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.
This article is not intended to be a comprehensive analysis on Catapult Group International, so if you are interested in understanding the company at a deeper level, take a look at Catapult Group International's company page on Simply Wall St. We've also compiled a list of important aspects you should further research:
Valuation: What is Catapult Group International 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 Catapult Group International 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 Catapult Group International’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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