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. The AU$439m market-cap company announced a latest loss of AU$7.7m on 30 June 2020 for its most recent financial year result. Many investors are wondering about the rate at which Catapult Group International 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.
Catapult Group International is bordering on breakeven, according to the 2 Australian Electronic analysts. They anticipate the company to incur a final loss in 2022, before generating positive profits of AU$3.2m in 2023. So, the company is predicted to breakeven approximately 3 years from now. 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 78%, 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, however, bear in mind 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 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 relevant factors you should further examine:
- 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.
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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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