Yojee Limited's (ASX:YOJ) Path To Profitability

With the business potentially at an important milestone, we thought we'd take a closer look at Yojee Limited's (ASX:YOJ) future prospects. Yojee Limited operates a cloud-based software as a service (SaaS) logistics platform in the Asia-Pacific region. With the latest financial year loss of AU$11m and a trailing-twelve-month loss of AU$9.0m, the AU$105m market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which Yojee 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.

See our latest analysis for Yojee

Yojee is bordering on breakeven, according to some Australian Software analysts. They anticipate the company to incur a final loss in 2023, before generating positive profits of AU$12m in 2024. The company is therefore projected to breakeven around 2 years 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 88% is expected, 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 Yojee's upcoming projects, but, keep in mind that generally 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 Yojee has no debt on its balance sheet, which is quite unusual for a cash-burning 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:

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

1. Valuation: What is Yojee 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 Yojee 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 Yojee’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.