PointsBet Holdings Limited (ASX:PBH): Is Breakeven Near?

PointsBet Holdings Limited (ASX:PBH) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. PointsBet Holdings Limited provides sports, racing, and iGaming betting products and services through its cloud-based technology platform in Australia. The AU$166m market-cap company’s loss lessened since it announced a AU$108m loss in the full financial year, compared to the latest trailing-twelve-month loss of AU$87m, as it approaches breakeven. The most pressing concern for investors is PointsBet Holdings' path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

View our latest analysis for PointsBet Holdings

Consensus from 6 of the Australian Hospitality analysts is that PointsBet Holdings is on the verge of breakeven. They expect the company to post a final loss in 2024, before turning a profit of AU$500k in 2025. Therefore, the company is expected to breakeven just over a year from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 116%, 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.

Underlying developments driving PointsBet Holdings' growth isn’t the focus of this broad overview, but, bear 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. PointsBet Holdings currently has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which usually has a high level of debt relative to its equity. This means that the company 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 PointsBet Holdings, so if you are interested in understanding the company at a deeper level, take a look at PointsBet Holdings' company page on Simply Wall St. We've also compiled a list of key aspects you should further examine:

1. Valuation: What is PointsBet Holdings 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 PointsBet Holdings 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 PointsBet Holdings’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.