Carebook Technologies Inc. (CVE:CRBK) Could Be Less Than A Year Away From Profitability

We feel now is a pretty good time to analyse Carebook Technologies Inc.'s (CVE:CRBK) business as it appears the company may be on the cusp of a considerable accomplishment. Carebook Technologies Inc., digital health company, develops digital health solutions. The CA$40m market-cap company posted a loss in its most recent financial year of CA$3.1m and a latest trailing-twelve-month loss of CA$6.1m leading to an even wider gap between loss and breakeven. As path to profitability is the topic on Carebook Technologies' investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for Carebook Technologies

Carebook Technologies is bordering on breakeven, according to the 2 Canadian Healthcare Services analysts. They expect the company to post a final loss in 2020, before turning a profit of CA$1.3m in 2021. The company is therefore projected to breakeven around a year from now or less! We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 120% is expected, which is rather optimistic! 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 Carebook Technologies' upcoming projects, but, bear in mind that by and large a healthcare tech company has lumpy cash flows which are contingent on the product and stage of development the company is in. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

Before we wrap up, there’s one issue worth mentioning. Carebook Technologies currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. These losses tend to occur only on paper, however, in other cases it can be forewarning.

Next Steps:

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

1. Valuation: What is Carebook Technologies 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 Carebook Technologies 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 Carebook Technologies’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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