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We Might See A Profit From PEXA Group Limited (ASX:PXA) Soon

With the business potentially at an important milestone, we thought we'd take a closer look at PEXA Group Limited's (ASX:PXA) future prospects. PEXA Group Limited operates a digital property settlements platform in Australia. With the latest financial year loss of AU$12m and a trailing-twelve-month loss of AU$530k, the AU$2.9b market-cap company alleviated its loss by moving closer towards its target of breakeven. The most pressing concern for investors is PEXA Group's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for PEXA Group

PEXA Group is bordering on breakeven, according to the 5 Australian Real Estate analysts. They anticipate the company to incur a final loss in 2021, before generating positive profits of AU$32m in 2022. The company is therefore projected to breakeven around 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 24% 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.

earnings-per-share-growth
earnings-per-share-growth

Given this is a high-level overview, we won’t go into details of PEXA Group's upcoming projects, though, take into account that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

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Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 24% 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 too many aspects of PEXA Group to cover in one brief article, but the key fundamentals for the company can all be found in one place – PEXA Group's company page on Simply Wall St. We've also put together a list of relevant factors you should further research:

  1. Valuation: What is PEXA Group 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 PEXA Group is currently mispriced by the market.

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

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.