Definitive Healthcare Corp. (NASDAQ:DH): Is Breakeven Near?
With the business potentially at an important milestone, we thought we'd take a closer look at Definitive Healthcare Corp.'s (NASDAQ:DH) future prospects. Definitive Healthcare Corp., through its software as a service platform, provides healthcare commercial intelligence in the United States. The US$3.5b market-cap company announced a latest loss of US$51m on 31 December 2021 for its most recent financial year result. Many investors are wondering about the rate at which Definitive Healthcare will turn a profit, with the big question being “when will the company breakeven?” 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 Definitive Healthcare
According to the 10 industry analysts covering Definitive Healthcare, the consensus is that breakeven is near. They expect the company to post a final loss in 2022, before turning a profit of US$10m in 2023. The company is therefore projected to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 100% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
We're not going to go through company-specific developments for Definitive Healthcare given that this is a high-level summary, however, take into account that typically healthcare tech companies, depending on the stage of product development, have irregular periods of cash flow. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 18% 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 Definitive Healthcare to cover in one brief article, but the key fundamentals for the company can all be found in one place – Definitive Healthcare's company page on Simply Wall St. We've also compiled a list of pertinent aspects you should further research:
Valuation: What is Definitive Healthcare 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 Definitive Healthcare 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 Definitive Healthcare’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.
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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.
