We feel now is a pretty good time to analyse Cluey Ltd's (ASX:CLU) business as it appears the company may be on the cusp of a considerable accomplishment. Cluey Ltd, an education technology company, provides online tutoring, learning support, and co/extracurricular services in Australia. The AU$33m market-cap company announced a latest loss of AU$21m on 30 June 2022 for its most recent financial year result. Many investors are wondering about the rate at which Cluey 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 Cluey
According to the 2 industry analysts covering Cluey, the consensus is that breakeven is near. They expect the company to post a final loss in 2024, before turning a profit of AU$250k in 2025. The company is therefore projected to breakeven around 2 years from today. 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 64% is expected, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Given this is a high-level overview, we won’t go into details of Cluey's upcoming projects, however, keep in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before we wrap up, there’s one aspect worth mentioning. Cluey currently has no debt on its balance sheet, which is rare for a loss-making growth company, which typically has high debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
Next Steps:
There are too many aspects of Cluey to cover in one brief article, but the key fundamentals for the company can all be found in one place – Cluey's company page on Simply Wall St. We've also put together a list of relevant factors you should further research:
- Valuation: What is Cluey 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 Cluey 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 Cluey’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.
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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.
About ASX:CLU
Cluey
An educational technology company, provides online tutoring, learning support, and co/extracurricular learning services in Australia, New Zealand, and the United Kingdom.
Adequate balance sheet low.
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