When Will Harmoney Corp Limited (ASX:HMY) Turn A Profit?

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 secured and unsecured personal loans through online in Australia and New Zealand. The AU$37m market-cap company announced a latest loss of AU$13m on 30 June 2024 for its most recent financial year result. 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 2 of the Australian Consumer Finance analysts is that Harmoney is on the verge of breakeven. They expect the company to post a final loss in 2025, before turning a profit of AU$1.4m in 2026. So, the company is predicted to breakeven approximately 2 years from today. 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 115% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for Harmoney given that this is a high-level summary, however, take into account that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one issue worth mentioning. Harmoney currently has a debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. Note that a higher debt obligation 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 put together a list of important factors you should further research:

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.