Audeara Limited (ASX:AUA): Is Breakeven Near?

Audeara Limited (ASX:AUA) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Audeara Limited, a hearing health technology company, engages in the development and sale of personalized listening products in Australia and North America. With the latest financial year loss of AU$3.7m and a trailing-twelve-month loss of AU$2.9m, the AU$7.7m market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which Audeara will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

See our latest analysis for Audeara

According to some industry analysts covering Audeara, breakeven is near. They anticipate the company to incur a final loss in 2025, before generating positive profits of AU$1.0m in 2026. Therefore, the company is expected to breakeven roughly 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 109% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Audeara's growth isn’t the focus of this broad overview, but, keep in mind that typically 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 judiciously, with debt making up 0.5% 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 Audeara to cover in one brief article, but the key fundamentals for the company can all be found in one place – Audeara's company page on Simply Wall St. We've also compiled a list of pertinent aspects you should further examine:

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.

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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.