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Eqonex Limited's (NASDAQ:EQOS) Path To Profitability

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  • EQOS

With the business potentially at an important milestone, we thought we'd take a closer look at Eqonex Limited's (NASDAQ:EQOS) future prospects. Diginex Limited, a digital asset financial services and advisory company, provides products, architecture, and infrastructure for the financial markets in the areas of digital asset ecosystem in Singapore and internationally. The US$235m market-cap company announced a latest loss of US$130m on 31 March 2021 for its most recent financial year result. Many investors are wondering about the rate at which Eqonex 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.

View our latest analysis for Eqonex

Consensus from 3 of the American Capital Markets analysts is that Eqonex is on the verge of breakeven. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$28m in 2024. So, the company is predicted to breakeven approximately 3 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 79% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
earnings-per-share-growth

We're not going to go through company-specific developments for Eqonex given that this is a high-level summary, though, take into account that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 1.5% 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 Eqonex to cover in one brief article, but the key fundamentals for the company can all be found in one place – Eqonex's company page on Simply Wall St. We've also compiled a list of key factors you should further research:

  1. Historical Track Record: What has Eqonex'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 Eqonex's board and the CEO’s background.

  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.

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.

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