CloudMD Software & Services Inc.'s (CVE:DOC) Profit Outlook

By
Simply Wall St
Published
May 12, 2021
TSXV:DOC

CloudMD Software & Services Inc. (CVE:DOC) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. CloudMD Software & Services Inc., a healthcare technology company, provides SaaS based health technology solutions to medical clinics in North America. The CA$406m market-cap company announced a latest loss of CA$12m on 31 December 2020 for its most recent financial year result. As path to profitability is the topic on CloudMD Software & Services' investors mind, we've decided to gauge market sentiment. 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 CloudMD Software & Services

Consensus from 5 of the Canadian Healthcare analysts is that CloudMD Software & Services is on the verge of breakeven. They anticipate the company to incur a final loss in 2021, before generating positive profits of CA$1.8m in 2022. Therefore, the company is expected to breakeven just over a year 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 114%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

earnings-per-share-growth
TSXV:DOC Earnings Per Share Growth May 12th 2021

Given this is a high-level overview, we won’t go into details of CloudMD Software & Services' upcoming projects, but, keep in mind that typically 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 judiciously, with debt making up 2.5% 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 CloudMD Software & Services to cover in one brief article, but the key fundamentals for the company can all be found in one place – CloudMD Software & Services' company page on Simply Wall St. We've also put together a list of essential factors you should further examine:

  1. Valuation: What is CloudMD Software & Services 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 CloudMD Software & Services 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 CloudMD Software & Services’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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