Loss-Making Change Financial Limited (ASX:CCA) Expected To Breakeven In The Medium-Term

With the business potentially at an important milestone, we thought we'd take a closer look at Change Financial Limited's (ASX:CCA) future prospects. Change Financial Limited provides payments management platform and payment testing solutions in South East Asia, Oceania, Latin America, the United States, and internationally. With the latest financial year loss of US$2.6m and a trailing-twelve-month loss of US$2.8m, the AU$41m market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on Change Financial's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

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Change Financial is bordering on breakeven, according to some Australian Diversified Financial analysts. They expect the company to post a final loss in 2025, before turning a profit of US$2.5m in 2026. Therefore, the company is expected to breakeven just over a year from now. 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 106% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won’t go into details of Change Financial's upcoming projects, but, bear in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

See our latest analysis for Change Financial

Before we wrap up, there’s one aspect worth mentioning. Change Financial 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 Change Financial, so if you are interested in understanding the company at a deeper level, take a look at Change Financial's company page on Simply Wall St. We've also put together a list of pertinent 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.