When Will Wellnex Life Limited (ASX:WNX) Become Profitable?

We feel now is a pretty good time to analyse Wellnex Life Limited's (ASX:WNX) business as it appears the company may be on the cusp of a considerable accomplishment. Wellnex Life Limited, together with its subsidiaries, develops, markets, and sells health and wellness solutions in Australia and internationally. The AU$17m market-cap company’s loss lessened since it announced a AU$14m loss in the full financial year, compared to the latest trailing-twelve-month loss of AU$12m, as it approaches breakeven. The most pressing concern for investors is Wellnex Life's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

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According to some industry analysts covering Wellnex Life, breakeven is near. They anticipate the company to incur a final loss in 2025, before generating positive profits of AU$700k in 2026. The company is therefore projected to breakeven just over a year 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 68% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Wellnex Life's growth isn’t the focus of this broad overview, however, keep in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

View our latest analysis for Wellnex Life

One thing we would like to bring into light with Wellnex Life is its debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Wellnex Life 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 Wellnex Life, take a look at Wellnex Life's company page on Simply Wall St. We've also put together a list of relevant aspects you should further research:

1. Historical Track Record: What has Wellnex Life'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 Wellnex Life'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.