When Will BlinkLab Limited (ASX:BB1) Turn A Profit?

With the business potentially at an important milestone, we thought we'd take a closer look at BlinkLab Limited's (ASX:BB1) future prospects. BlinkLab Limited focuses on the development and commercialization of intellectual property related to smartphone-neurobehavioral testing. The company’s loss has recently broadened since it announced a AU$1.8m loss in the full financial year, compared to the latest trailing-twelve-month loss of AU$3.8m, moving it further away from breakeven. The most pressing concern for investors is BlinkLab's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

According to the 2 industry analysts covering BlinkLab, the consensus is that breakeven is near. They expect the company to post a final loss in 2026, before turning a profit of AU$1.7m in 2027. Therefore, the company is expected to breakeven roughly 2 years from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 64%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving BlinkLab's growth isn’t the focus of this broad overview, but, keep in mind that typically a healthcare tech company has lumpy cash flows which are contingent on the product and stage of development the company is in. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

Check out our latest analysis for BlinkLab

Before we wrap up, there’s one aspect worth mentioning. BlinkLab currently has no debt on its balance sheet, which is quite unusual for a cash-burning healthcare tech company, which typically has high debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

This article is not intended to be a comprehensive analysis on BlinkLab, so if you are interested in understanding the company at a deeper level, take a look at BlinkLab's company page on Simply Wall St. We've also put together a list of essential aspects you should look at:

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