We feel now is a pretty good time to analyse Bigtincan Holdings Limited's (ASX:BTH) business as it appears the company may be on the cusp of a considerable accomplishment. Bigtincan Holdings Limited provides sales enablement automation software in Australia, the United States, and internationally. On 30 June 2020, the AU$471m market-cap company posted a loss of AU$12m for its most recent financial year. Many investors are wondering about the rate at which Bigtincan Holdings 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.
Bigtincan Holdings is bordering on breakeven, according to the 2 Australian Software analysts. They expect the company to post a final loss in 2022, before turning a profit of AU$900k in 2023. Therefore, the company is expected to breakeven roughly 3 years from today. 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 84% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Given this is a high-level overview, we won’t go into details of Bigtincan Holdings' upcoming projects, though, take into account that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing we’d like to point out is that Bigtincan Holdings has no debt on its balance sheet, which is quite unusual for a cash-burning loss-making, growth company, which usually has a high level of 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.
There are key fundamentals of Bigtincan Holdings 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 Bigtincan Holdings, take a look at Bigtincan Holdings' company page on Simply Wall St. We've also compiled a list of relevant aspects you should look at:
Valuation: What is Bigtincan Holdings 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 Bigtincan Holdings 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 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.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email firstname.lastname@example.org.