Analysts Expect Breakeven For Damstra Holdings Limited (ASX:DTC) Before Long

By
Simply Wall St
Published
April 29, 2021
ASX:DTC
Source: Shutterstock

We feel now is a pretty good time to analyse Damstra Holdings Limited's (ASX:DTC) business as it appears the company may be on the cusp of a considerable accomplishment. Damstra Holdings Limited provides workplace management solutions to various industry segments worldwide. With the latest financial year loss of AU$3.8m and a trailing-twelve-month loss of AU$5.0m, the AU$215m market-cap company amplified its loss by moving further away from its breakeven target. Many investors are wondering about the rate at which Damstra Holdings will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

See our latest analysis for Damstra Holdings

Damstra Holdings is bordering on breakeven, according to the 4 Australian Software analysts. They anticipate the company to incur a final loss in 2021, before generating positive profits of AU$982k in 2022. So, the company is predicted to breakeven just over a year from today. 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 85% 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.

earnings-per-share-growth
ASX:DTC Earnings Per Share Growth April 30th 2021

Underlying developments driving Damstra Holdings' growth isn’t the focus of this broad overview, though, bear in mind that typically 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. Damstra Holdings currently has no debt on its balance sheet, which is rare for a loss-making growth company, which typically has high 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 Damstra Holdings to cover in one brief article, but the key fundamentals for the company can all be found in one place – Damstra Holdings' company page on Simply Wall St. We've also compiled a list of essential aspects you should look at:

  1. Valuation: What is Damstra 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 Damstra 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 Damstra 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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Simply Wall St

Simply Wall St is focused on providing unbiased, high-quality research coverage on every listed company in the world. Our research team consists of data scientists and multiple equity analysts with over two decades worth of financial markets experience between them.