Bluechiip Limited's (ASX:BCT) Shift From Loss To Profit

With the business potentially at an important milestone, we thought we'd take a closer look at Bluechiip Limited's (ASX:BCT) future prospects. Bluechiip Limited engages in the development and commercialization of a wireless tracking solutions for the healthcare and life science, security, defense, and manufacturing industries. The AU$5.5m market-cap company announced a latest loss of AU$5.0m on 30 June 2023 for its most recent financial year result. The most pressing concern for investors is Bluechiip's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

Check out our latest analysis for Bluechiip

Expectations from some of the Australian Electronic analysts is that Bluechiip is on the verge of breakeven. They anticipate the company to incur a final loss in 2025, before generating positive profits of AU$400k in 2026. So, the company is predicted to breakeven approximately 2 years from now. 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 80% 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.

We're not going to go through company-specific developments for Bluechiip given that this is a high-level summary, however, take into account 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 The company has managed its capital prudently, with debt making up 27% 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:

There are too many aspects of Bluechiip to cover in one brief article, but the key fundamentals for the company can all be found in one place – Bluechiip's company page on Simply Wall St. We've also compiled a list of key aspects you should further research:

1. Valuation: What is Bluechiip 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 Bluechiip 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 Bluechiip’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.