Bigtincan Holdings Limited's (ASX:BTH) Path To Profitability

We feel now is a pretty good time to analyse Bigtincan Holdings Limited's (ASX:BTH) business as it appears the company may be on the cusp of a considerable accomplishment. Bigtincan Holdings Limited, a software development company, provides software as a services application platform. The AU$401m market-cap company announced a latest loss of AU$12m on 30 June 2020 for its most recent financial year result. Many investors are wondering about the rate at which Bigtincan Holdings 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 Bigtincan Holdings

Bigtincan Holdings is bordering on breakeven, according to the 2 Australian Software analysts. They anticipate the company to incur a final loss in 2022, before generating positive profits of AU$850k in 2023. Therefore, the company is expected to breakeven roughly 3 years from now. 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 83%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

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

One thing we’d like to point out is that Bigtincan Holdings has no debt on its balance sheet, which is rare for a loss-making loss-making, growth company, which usually has a high level of 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:

There are too many aspects of Bigtincan Holdings to cover in one brief article, but the key fundamentals for the company can all be found in one place – Bigtincan Holdings' company page on Simply Wall St. We've also put together a list of relevant aspects you should further research:

1. Valuation: What is Bigtincan Holdings 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 Bigtincan Holdings 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 Bigtincan Holdings’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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