Infotrust Ltd (ASX:ITS): When Will It Breakeven?

With the business potentially at an important milestone, we thought we'd take a closer look at Infotrust Ltd's (ASX:ITS) future prospects. Infotrust Ltd engages in the provision of cyber security, and technology services and solutions in Australia. The AU$43m market-cap company posted a loss in its most recent financial year of AU$1.4m and a latest trailing-twelve-month loss of AU$917k shrinking the gap between loss and breakeven. As path to profitability is the topic on Infotrust's investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

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Expectations from some of the Australian IT analysts is that Infotrust is on the verge of breakeven. They anticipate the company to incur a final loss in 2027, before generating positive profits of AU$900k in 2028. Therefore, the company is expected to breakeven roughly 2 years 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 80%, which signals high confidence from analysts. 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 Infotrust's upcoming projects, however, keep in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

View our latest analysis for Infotrust

One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 33% 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 Infotrust, so if you are interested in understanding the company at a deeper level, take a look at Infotrust's company page on Simply Wall St. We've also put together a list of key factors you should further examine:

1. Valuation: What is Infotrust 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 Infotrust 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 Infotrust’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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.