Yahoo Finance Nearmap Ltd (ASX:NEA): When Will It Breakeven?
Nearmap Ltd's (ASX:NEA): Nearmap Ltd provides online aerial photomapping services in Australia, New Zealand, and North America. With the latest financial year loss of -AU$14.9m and a trailing-twelve month of -AU$31.6m, the AU$1.1b market-cap amplifies its loss by moving further away from its breakeven target. The most pressing concern for investors is NEA’s path to profitability – when will it breakeven? Below I will provide a high-level summary of the industry analysts’ expectations for NEA.
Check out our latest analysis for Nearmap
According to the 6 industry analysts covering NEA, the consensus is breakeven is near. They anticipate the company to incur a final loss in 2022, before generating positive profits of AU$44m in 2023. So, NEA is predicted to breakeven approximately 3 years from today. In order to meet this breakeven date, I calculated the rate at which NEA must grow year-on-year. It turns out an average annual growth rate of 67% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, NEA may become profitable much later than analysts predict.
Underlying developments driving NEA’s growth isn’t the focus of this broad overview, though, keep in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before I wrap up, there’s one aspect worth mentioning. NEA currently has no debt on its balance sheet, which is rare for a loss-making loss-making, growth company, which usually has a high level of debt relative to its equity. This means that NEA has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on NEA, so if you are interested in understanding the company at a deeper level, take a look at NEA’s company page on Simply Wall St. I’ve also put together a list of important factors you should further examine:
Valuation: What is NEA 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 NEA 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 Nearmap’s board and the CEO’s back ground.
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.
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