Change Financial Limited's (ASX:CCA) Shift From Loss To Profit

Change Financial Limited (ASX:CCA) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Change Financial Limited, a fintech company, offers payment as a service solutions in South East Asia, Oceania, Latin America, the United States, and internationally. With the latest financial year loss of US$2.9m and a trailing-twelve-month loss of US$2.5m, the AU$38m market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which Change Financial 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 Change Financial

Expectations from some of the Australian Diversified Financial analysts is that Change Financial is on the verge of breakeven. They expect the company to post a final loss in 2025, before turning a profit of US$1.1m in 2026. So, the company is predicted to breakeven approximately 2 years from today. 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 91% 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 Change Financial'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’d like to point out is that Change Financial has no debt on its balance sheet, which is quite unusual for a cash-burning 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 key fundamentals of Change Financial which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Change Financial, take a look at Change Financial's company page on Simply Wall St. We've also put together a list of essential aspects you should further examine:

1. Historical Track Record: What has Change Financial'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 Change Financial'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.