We feel now is a pretty good time to analyse MedAdvisor Limited's (ASX:MDR) business as it appears the company may be on the cusp of a considerable accomplishment. MedAdvisor Limited, together with its subsidiaries, develops and delivers software in Australia, the United States, the United Kingdom, and Asia. On 30 June 2022, the AU$81m market-cap company posted a loss of AU$17m for its most recent financial year. As path to profitability is the topic on MedAdvisor'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.
MedAdvisor is bordering on breakeven, according to some Australian Healthcare Services analysts. They expect the company to post a final loss in 2024, before turning a profit of AU$2.9m in 2025. The company is therefore projected to breakeven around 3 years from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 85% is expected, 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 MedAdvisor's growth isn’t the focus of this broad overview, but, take into account that by and large a healthcare tech company has lumpy cash flows which are contingent on the product and stage of development the company is in. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 32% 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.
There are key fundamentals of MedAdvisor 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 MedAdvisor, take a look at MedAdvisor's company page on Simply Wall St. We've also put together a list of pertinent factors you should further examine:
Valuation: What is MedAdvisor 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 MedAdvisor 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 MedAdvisor’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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