Pureprofile Ltd (ASX:PPL): Is Breakeven Near?

We feel now is a pretty good time to analyse Pureprofile Ltd's (ASX:PPL) business as it appears the company may be on the cusp of a considerable accomplishment. Pureprofile Ltd provides profile marketing and insights technology services for marketers, researchers, and publishers in Australia and internationally. On 30 June 2020, the AU$25m market-cap company posted a loss of AU$9.7m for its most recent financial year. As path to profitability is the topic on Pureprofile's 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 Pureprofile

Expectations from some of the Australian Media analysts is that Pureprofile is on the verge of breakeven. They expect the company to post a final loss in 2021, before turning a profit of AU$1.9m in 2022. The company is therefore projected to breakeven just over a year from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 63% is expected, 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 Pureprofile's growth isn’t the focus of this broad overview, though, take into account that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one issue worth mentioning. Pureprofile currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. Oftentimes, losses exist only on paper but other times, it can be a red flag.

Next Steps:

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

1. Valuation: What is Pureprofile 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 Pureprofile 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 Pureprofile’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. 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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