When Will Beforepay Group Limited (ASX:B4P) Breakeven?

We feel now is a pretty good time to analyse Beforepay Group Limited's (ASX:B4P) business as it appears the company may be on the cusp of a considerable accomplishment. Beforepay Group Limited engages in the provision of pay-on-demand services through mobile applications in Australia. The AU$33m market-cap company’s loss lessened since it announced a AU$6.6m loss in the full financial year, compared to the latest trailing-twelve-month loss of AU$23k, as it approaches breakeven. Many investors are wondering about the rate at which Beforepay Group will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

See 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 2024, before generating positive profits of AU$2.7m in 2025. So, the company is predicted 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 38%, which is extremely buoyant. 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, however, take into account that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

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

Next Steps:

This article is not intended to be a comprehensive analysis on Beforepay Group, so if you are interested in understanding the company at a deeper level, take a look at Beforepay Group's company page on Simply Wall St. We've also put together a list of key aspects 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.

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.