When Will Catapult Group International Limited (ASX:CAT) Breakeven?

Catapult Group International Limited (ASX:CAT) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Catapult Group International Limited develops and sells wearable tracking solutions and analytics. The company’s loss has recently broadened since it announced a US$5.3m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$7.2m, moving it further away from breakeven. The most pressing concern for investors is Catapult Group International'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.

View our latest analysis for Catapult Group International

Consensus from 4 of the Australian Electronic analysts is that Catapult Group International is on the verge of breakeven. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$10m in 2024. Therefore, the company is expected to breakeven roughly 3 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 67% year-on-year, on average, 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 Catapult Group International's upcoming projects, though, bear in mind that by and large 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. The company has managed its capital judiciously, with debt making up 2.1% 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 Catapult Group International, so if you are interested in understanding the company at a deeper level, take a look at Catapult Group International's company page on Simply Wall St. We've also compiled a list of relevant factors you should further research:

1. Valuation: What is Catapult Group International 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 Catapult Group International 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 Catapult Group International’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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