We feel now is a pretty good time to analyse CV Check Ltd's (ASX:CV1) business as it appears the company may be on the cusp of a considerable accomplishment. CV Check Ltd, together with its subsidiaries, provides screening and verification services to for organisations, employers, and individuals in Australia and New Zealand. The AU$48m market-cap company posted a loss in its most recent financial year of AU$1.0m and a latest trailing-twelve-month loss of AU$1.6m leading to an even wider gap between loss and breakeven. As path to profitability is the topic on CV Check's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.
Consensus from 2 of the Australian IT analysts is that CV Check is on the verge of breakeven. They anticipate the company to incur a final loss in 2022, before generating positive profits of AU$449k in 2023. Therefore, the company is expected 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 66% 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 CV Check'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 aspect worth mentioning. CV Check currently has no debt on its balance sheet, which is rare for a loss-making growth 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.
There are too many aspects of CV Check to cover in one brief article, but the key fundamentals for the company can all be found in one place – CV Check's company page on Simply Wall St. We've also compiled a list of essential aspects you should further examine:
Valuation: What is CV Check 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 CV Check 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 CV Check’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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