Market Sentiment Around Loss-Making ImExHS Limited (ASX:IME)

ImExHS Limited (ASX:IME) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. ImExHS Limited operates as an imaging software as a service and ancillary service provider in Australia and internationally. The AU$66m market-cap company announced a latest loss of AU$3.6m on 31 December 2020 for its most recent financial year result. As path to profitability is the topic on ImExHS' investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

View our latest analysis for ImExHS

According to some industry analysts covering ImExHS, breakeven is near. They anticipate the company to incur a final loss in 2021, before generating positive profits of AU$1.6m in 2022. Therefore, the company is expected to breakeven just over a year 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 97%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for ImExHS given that this is a high-level summary, though, keep 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, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 10% 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:

This article is not intended to be a comprehensive analysis on ImExHS, so if you are interested in understanding the company at a deeper level, take a look at ImExHS' company page on Simply Wall St. We've also compiled a list of key factors you should further examine:

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