When Will Pointerra Limited (ASX:3DP) Turn A Profit?

We feel now is a pretty good time to analyse Pointerra Limited's (ASX:3DP) business as it appears the company may be on the cusp of a considerable accomplishment. Pointerra Limited develops and commercializes an end-to-end data as a service solution for managing, visualizing, working in, analyzing, and sharing 3D datasets in the United States, Australia, and internationally. With the latest financial year loss of AU$2.5m and a trailing-twelve-month loss of AU$2.2m, the AU$361m market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which Pointerra will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for Pointerra

Pointerra is bordering on breakeven, according to some Australian Software analysts. They expect the company to post a final loss in 2021, before turning a profit of AU$5.7m in 2022. The company is therefore projected to breakeven just over a year 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 63%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for Pointerra given that this is a high-level summary, however, 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.

One thing we’d like to point out is that Pointerra has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which usually has a high level of debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

This article is not intended to be a comprehensive analysis on Pointerra, so if you are interested in understanding the company at a deeper level, take a look at Pointerra's company page on Simply Wall St. We've also put together a list of essential aspects you should further research:

1. Valuation: What is Pointerra 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 Pointerra 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 Pointerra’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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