When Will Novatti Group Limited (ASX:NOV) Turn A Profit?

Novatti Group Limited (ASX:NOV) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Novatti Group Limited operates as a fintech company worldwide. The AU$18m market-cap company posted a loss in its most recent financial year of AU$26m and a latest trailing-twelve-month loss of AU$27m leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which Novatti Group will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for Novatti Group

According to some industry analysts covering Novatti Group, breakeven is near. They expect the company to post a final loss in 2025, before turning a profit of AU$9.8m in 2026. So, the company is predicted to breakeven approximately 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 86%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for Novatti Group given that this is a high-level summary, but, bear in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 40% 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 Novatti Group, so if you are interested in understanding the company at a deeper level, take a look at Novatti Group's company page on Simply Wall St. We've also put together a list of essential factors you should further examine:

1. Valuation: What is Novatti 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 Novatti 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 Novatti 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. 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.

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