Bigtincan Holdings Limited's (ASX:BTH): Bigtincan Holdings Limited, a software development company, provides software as a services (Saas) application platform. On 30 June 2019, the AU$140m market-cap posted a loss of -AU$4.1m for its most recent financial year. Many investors are wondering the rate at which BTH will turn a profit, with the big question being “when will the company breakeven?” I’ve put together a brief outline of industry analyst expectations for BTH, its year of breakeven and its implied growth rate.
According to the 3 industry analysts covering BTH, the consensus is breakeven is near. They expect the company to post a final loss in 2021, before turning a profit of AU$2.5m in 2022. So, BTH is predicted to breakeven approximately 3 years from today. How fast will BTH have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 93% year-on-year, on average, 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, I won’t go into details of BTH’s upcoming projects, though, bear in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing I’d like to point out is that BTH has no debt on its balance sheet, which is rare for a loss-making loss-making, growth company, which usually has a high level of debt relative to its equity. BTH currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
There are too many aspects of BTH to cover in one brief article, but the key fundamentals for the company can all be found in one place – BTH’s company page on Simply Wall St. I’ve also put together a list of key aspects you should look at:
- Valuation: What is BTH 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 BTH 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 Bigtincan Holdings’s board and the CEO’s back ground.
- 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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