Volpara Health Technologies Limited (ASX:VHT): When Will It Breakeven?

Volpara Health Technologies Limited (ASX:VHT) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Volpara Health Technologies Limited provides breast imaging analytics software products in New Zealand. The AU$190m market-cap company announced a latest loss of NZ$9.8m on 31 March 2023 for its most recent financial year result. Many investors are wondering about the rate at which Volpara Health Technologies will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

Check out our latest analysis for Volpara Health Technologies

According to the 2 industry analysts covering Volpara Health Technologies, the consensus is that breakeven is near. They expect the company to post a final loss in 2024, before turning a profit of NZ$1.2m in 2025. 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 100%, 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 Volpara Health Technologies given that this is a high-level summary, though, take into account that by and large healthcare tech companies, depending on the stage of product development, have irregular periods of cash flow. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we’d like to point out is that Volpara Health Technologies has no debt on its balance sheet, which is rare for a loss-making healthcare tech company, which typically has high debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

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

1. Valuation: What is Volpara Health Technologies 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 Volpara Health Technologies 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 Volpara Health Technologies’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.