Analysts Are Optimistic We'll See A Profit From AnteoTech Limited (ASX:ADO)

By
Simply Wall St
Published
December 07, 2021
ASX:ADO
Source: Shutterstock

AnteoTech Limited (ASX:ADO) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. AnteoTech Limited, a surface chemistry company, develops, commercializes, manufactures, and distributes products for the life sciences, diagnostics, energy, and medical device markets primarily in Australia. The AU$355m market-cap company announced a latest loss of AU$6.2m on 30 June 2021 for its most recent financial year result. The most pressing concern for investors is AnteoTech'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.

View our latest analysis for AnteoTech

According to some industry analysts covering AnteoTech, breakeven is near. They anticipate the company to incur a final loss in 2021, before generating positive profits of AU$2.0m in 2022. The company is therefore projected to breakeven around a year from now or less! We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 66% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
ASX:ADO Earnings Per Share Growth December 7th 2021

Underlying developments driving AnteoTech's growth isn’t the focus of this broad overview, though, take into account that generally a life science 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. AnteoTech currently has no debt on its balance sheet, which is rare for a loss-making life science 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 AnteoTech, so if you are interested in understanding the company at a deeper level, take a look at AnteoTech's company page on Simply Wall St. We've also compiled a list of key aspects you should further research:

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