Stock Analysis

East 33 Limited (ASX:E33) About To Shift From Loss To Profit

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ASX:E33
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We feel now is a pretty good time to analyse East 33 Limited's (ASX:E33) business as it appears the company may be on the cusp of a considerable accomplishment. East 33 Limited produces, processes, and supplies rock oysters in Australia. The AU$16m market-cap company announced a latest loss of AU$9.0m on 30 June 2022 for its most recent financial year result. The most pressing concern for investors is East 33's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out the opportunities and risks within the AU Food industry.

Expectations from some of the Australian Food analysts is that East 33 is on the verge of breakeven. They anticipate the company to incur a final loss in 2022, before generating positive profits of AU$2.5m in 2023. So, the company is predicted to breakeven approximately 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 59% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

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ASX:E33 Earnings Per Share Growth December 2nd 2022

We're not going to go through company-specific developments for East 33 given that this is a high-level summary, though, take into account that generally 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 aspect worth mentioning. The company has managed its capital judiciously, with debt making up 28% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of East 33 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 East 33, take a look at East 33's company page on Simply Wall St. We've also compiled a list of important factors you should look at:

  1. Valuation: What is East 33 worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether East 33 is currently mispriced by the market.
  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on East 33’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.

Valuation is complex, but we're helping make it simple.

Find out whether East 33 is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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