Market Sentiment Around Loss-Making Audeara Limited (ASX:AUA)

We feel now is a pretty good time to analyse Audeara Limited's (ASX:AUA) business as it appears the company may be on the cusp of a considerable accomplishment. Audeara Limited, a hearing health technology company, develops and sells personalized listening products. The AU$12m market-cap company announced a latest loss of AU$1.3m on 30 June 2021 for its most recent financial year result. Many investors are wondering about the rate at which Audeara 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 Audeara

According to some industry analysts covering Audeara, breakeven is near. They expect the company to post a final loss in 2023, before turning a profit of AU$400k in 2024. So, the company is predicted to breakeven approximately 3 years 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 72%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth

Underlying developments driving Audeara's growth isn’t the focus of this broad overview, but, keep in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 0.9% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

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

1. Historical Track Record: What has Audeara's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.

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

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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