Harmoney Corp Limited (ASX:HMY): Are Analysts Optimistic?

With the business potentially at an important milestone, we thought we'd take a closer look at Harmoney Corp Limited's (ASX:HMY) future prospects. Harmoney Corp Limited provides online secured and unsecured personal loans in Australia and New Zealand. The AU$35m market-cap company posted a loss in its most recent financial year of AU$7.6m and a latest trailing-twelve-month loss of AU$4.8m shrinking the gap between loss and breakeven. As path to profitability is the topic on Harmoney'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.

See our latest analysis for Harmoney

Consensus from 3 of the Australian Consumer Finance analysts is that Harmoney is on the verge of breakeven. They anticipate the company to incur a final loss in 2025, before generating positive profits of AU$2.2m in 2026. So, the company is predicted to breakeven approximately 2 years from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 89% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for Harmoney given that this is a high-level summary, though, take into account that generally 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 Harmoney is its debt-to-equity ratio of over 2x. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

There are key fundamentals of Harmoney 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 Harmoney, take a look at Harmoney's company page on Simply Wall St. We've also compiled a list of key aspects you should further examine:

1. Historical Track Record: What has Harmoney'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 Harmoney'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.