With the business potentially at an important milestone, we thought we'd take a closer look at APM Human Services International Limited's (ASX:APM) future prospects. APM Human Services International Limited provides human and health services in Australia and internationally. The company’s loss has recently broadened since it announced a AU$1.4m loss in the full financial year, compared to the latest trailing-twelve-month loss of AU$43m, moving it further away from breakeven. As path to profitability is the topic on APM Human Services 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.
According to the 4 industry analysts covering APM Human Services International, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2022, before generating positive profits of AU$147m in 2023. Therefore, the company is expected 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 63%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving APM Human Services International's growth isn’t the focus of this broad overview, however, keep in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing we would like to bring into light with APM Human Services International is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in APM Human Services International's case is 42%. Note that a higher debt obligation increases the risk in investing in the loss-making company.
This article is not intended to be a comprehensive analysis on APM Human Services International, so if you are interested in understanding the company at a deeper level, take a look at APM Human Services 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 APM Human Services 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 APM Human Services 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 APM Human Services 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.
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.
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