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Alcidion Group Limited's (ASX:ALC) Shift From Loss To Profit

Alcidion Group Limited (ASX:ALC) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Alcidion Group Limited, together with its subsidiaries, engages in the development and licensing of healthcare software products in Australia, New Zealand, and the United Kingdom. With the latest financial year loss of AU$3.6m and a trailing-twelve-month loss of AU$5.1m, the AU$109m market-cap company amplified its loss by moving further away from its breakeven target. Many investors are wondering about the rate at which Alcidion Group will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for Alcidion Group

According to the 3 industry analysts covering Alcidion Group, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2024, before generating positive profits of AU$433k in 2025. So, the company is predicted to breakeven just over a year 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 91%, 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 Alcidion Group given that this is a high-level summary, but, take into account that generally healthcare tech companies, depending on the stage of product development, have irregular periods of cash flow. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

One thing we’d like to point out is that Alcidion Group has no debt on its balance sheet, which is quite unusual for a cash-burning healthcare tech company, which typically has high debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

There are key fundamentals of Alcidion Group 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 Alcidion Group, take a look at Alcidion Group's company page on Simply Wall St. We've also put together a list of key factors you should further examine:

  1. Valuation: What is Alcidion Group 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 Alcidion Group is currently mispriced by the market.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Alcidion Group’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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.