When Will Janison Education Group Limited (ASX:JAN) Become Profitable?

We feel now is a pretty good time to analyse Janison Education Group Limited's (ASX:JAN) business as it appears the company may be on the cusp of a considerable accomplishment. Janison Education Group Limited engages in licensing, hosting, and supporting online student assessment and e-learning software solutions in Australia and internationally. On 30 June 2020, the AU$121m market-cap company posted a loss of AU$2.2m for its most recent financial year. As path to profitability is the topic on Janison Education Group'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.

Check out our latest analysis for Janison Education Group

Janison Education Group is bordering on breakeven, according to the 3 Australian Software analysts. They anticipate the company to incur a final loss in 2022, before generating positive profits of AU$2.0m in 2023. The company is therefore projected to breakeven around 2 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 95%, which is rather optimistic! 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 Janison Education Group's upcoming projects, but, bear in mind that generally 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. Janison Education Group currently has no debt on its balance sheet, which is quite unusual for a cash-burning loss-making, growth company, which usually has a high level of debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

This article is not intended to be a comprehensive analysis on Janison Education Group, so if you are interested in understanding the company at a deeper level, take a look at Janison Education Group's company page on Simply Wall St. We've also compiled a list of important factors you should look at:

1. Valuation: What is Janison Education Group 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 Janison Education Group 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 Janison Education Group’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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