When Will Bill Identity Limited (ASX:BID) Turn A Profit?

Bill Identity Limited (ASX:BID) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Bill Identity Limited, a technology company, provides utility bill expense management solutions in Australia, New Zealand, the United States, the United Kingdom, and Europe. With the latest financial year loss of AU$6.9m and a trailing-twelve-month loss of AU$7.1m, the AU$108m market-cap company amplified its loss by moving further away from its breakeven target. The most pressing concern for investors is Bill Identity's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for Bill Identity

Expectations from some of the Australian Software analysts is that Bill Identity is on the verge of breakeven. They anticipate the company to incur a final loss in 2021, before generating positive profits of AU$300k in 2022. Therefore, the company is expected to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 108% year-on-year, on average, 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 Bill Identity given that this is a high-level summary, but, keep in mind 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 aspect worth mentioning. The company has managed its capital judiciously, with debt making up 1.3% 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 put together a list of essential factors you should further research:

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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