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We feel now is a pretty good time to analyse Advanced Human Imaging Limited's (ASX:AHI) business as it appears the company may be on the cusp of a considerable accomplishment. Advanced Human Imaging Limited operates as a mobile application and technology development company worldwide. On 30 June 2021, the AU$127m market-cap company posted a loss of AU$14m for its most recent financial year. Many investors are wondering about the rate at which Advanced Human Imaging 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.
Expectations from some of the Australian Software analysts is that Advanced Human Imaging is on the verge of breakeven. They expect the company to post a final loss in 2022, before turning a profit of AU$6.4m in 2023. So, the company is predicted to breakeven just over a year from now. 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 92% 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.
Underlying developments driving Advanced Human Imaging's growth isn’t the focus of this broad overview, though, bear in mind that generally 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 issue worth mentioning. Advanced Human Imaging currently has a debt-to-equity ratio of 110%. Typically, debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.
This article is not intended to be a comprehensive analysis on Advanced Human Imaging, so if you are interested in understanding the company at a deeper level, take a look at Advanced Human Imaging's company page on Simply Wall St. We've also put together a list of important aspects you should look at:
Valuation: What is Advanced Human Imaging 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 Advanced Human Imaging 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 Advanced Human Imaging’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.