Bill Identity Limited's (ASX:BID) Shift From Loss To Profit

With the business potentially at an important milestone, we thought we'd take a closer look at Bill Identity Limited's (ASX:BID) future prospects. Bill Identity Limited provides energy spend management services through its cloud-based software platform in Australia, New Zealand, the United Kingdom, the United States, and Europe. The AU$179m market-cap company announced a latest loss of AU$6.9m on 30 June 2020 for its most recent financial year result. Many investors are wondering about the rate at which Bill Identity 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.

View our latest analysis for Bill Identity

Bill Identity is bordering on breakeven, according to some Australian Software analysts. They anticipate the company to incur a final loss in 2021, before generating positive profits of AU$2.3m in 2022. So, the company is predicted to breakeven approximately 2 years 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 107% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of Bill Identity's upcoming projects, but, keep in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 4.0% 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:

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

1. Valuation: What is Bill Identity 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 Bill Identity 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 Bill Identity’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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