Beforepay Group Limited (ASX:B4P) About To Shift From Loss To Profit

With the business potentially at an important milestone, we thought we'd take a closer look at Beforepay Group Limited's (ASX:B4P) future prospects. Beforepay Group Limited engages in the provision of pay-on-demand services through mobile applications in Australia. With the latest financial year loss of AU$6.6m and a trailing-twelve-month loss of AU$23k, the AU$33m market-cap company alleviated its loss by moving closer towards its target of breakeven. The most pressing concern for investors is Beforepay Group's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

Check out our latest analysis for Beforepay Group

According to the 2 industry analysts covering Beforepay Group, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2023, before generating positive profits of AU$542k in 2024. Therefore, the company is expected to breakeven roughly a year from now or less! At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 30%, 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 Beforepay Group's growth isn’t the focus of this broad overview, but, take into account that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we would like to bring into light with Beforepay Group is its debt-to-equity ratio of 107%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

There are too many aspects of Beforepay Group to cover in one brief article, but the key fundamentals for the company can all be found in one place – Beforepay Group's company page on Simply Wall St. We've also compiled a list of important factors you should further examine:

1. Historical Track Record: What has Beforepay Group'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 Beforepay 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.

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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.