Home Consortium Limited (ASX:HMC) On The Verge Of Breaking Even

We feel now is a pretty good time to analyse Home Consortium Limited's (ASX:HMC) business as it appears the company may be on the cusp of a considerable accomplishment. Home Consortium Limited, together with its subsidiaries, owns, develops, and manages real estate properties in Australia. The company’s loss has recently broadened since it announced a AU$2.8m loss in the full financial year, compared to the latest trailing-twelve-month loss of AU$45m, moving it further away from breakeven. Many investors are wondering about the rate at which Home Consortium 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 Home Consortium

According to the 4 industry analysts covering Home Consortium, the consensus is that breakeven is near. They expect the company to post a final loss in 2020, before turning a profit of AU$27m in 2021. 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 53% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Home Consortium's growth isn’t the focus of this broad overview, though, take into account that generally 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 aspect worth mentioning. The company has managed its capital prudently, with debt making up 26% 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 Home Consortium 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 Home Consortium, take a look at Home Consortium's company page on Simply Wall St. We've also compiled a list of pertinent aspects you should further research:

1. Valuation: What is Home Consortium 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 Home Consortium 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 Home Consortium’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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