When Can We Expect A Profit From Careteq Limited (ASX:CTQ)?

We feel now is a pretty good time to analyse Careteq Limited's (ASX:CTQ) business as it appears the company may be on the cusp of a considerable accomplishment. Careteq Limited, a medication management services company for health, aged, and home care sectors worldwide. On 30 June 2024, the AU$2.8m market-cap company posted a loss of AU$1.9m for its most recent financial year. The most pressing concern for investors is Careteq'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.

View our latest analysis for Careteq

Careteq is bordering on breakeven, according to some Australian Healthcare Services analysts. They expect the company to post a final loss in 2025, before turning a profit of AU$800k in 2026. Therefore, the company is expected to breakeven roughly 2 years from today. 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 127%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of Careteq's upcoming projects, though, bear in mind that by and large a healthcare tech company has lumpy cash flows which are contingent on the product and stage of development the company is in. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 0.1% 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 Careteq 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 Careteq, take a look at Careteq's company page on Simply Wall St. We've also compiled a list of relevant aspects you should look at:

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