When Can We Expect A Profit From Catapult Group International Limited (ASX:CAT)?
We feel now is a pretty good time to analyse Catapult Group International Limited's (ASX:CAT) business as it appears the company may be on the cusp of a considerable accomplishment. Catapult Group International Limited develops and sells wearable tracking solutions and analytics. With the latest financial year loss of US$5.3m and a trailing-twelve-month loss of US$7.2m, the AU$389m market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on Catapult Group International's 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.
See our latest analysis for Catapult Group International
Consensus from 3 of the Australian Electronic analysts is that Catapult Group International is on the verge of breakeven. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$10m in 2024. So, the company is predicted to breakeven approximately 3 years from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 68%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
We're not going to go through company-specific developments for Catapult Group International given that this is a high-level summary, however, bear in mind that by and large 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 2.1% 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 key fundamentals of Catapult Group International 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 Catapult Group International, take a look at Catapult Group International's company page on Simply Wall St. We've also put together a list of relevant factors 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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