Alithya Group Inc. (TSE:ALYA) Is About To Turn The Corner

Alithya Group Inc. (TSE:ALYA) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Alithya Group Inc. provides strategy and digital technology services in Canada, the United States, and Europe. On 31 March 2024, the CA$182m market-cap company posted a loss of CA$17m for its most recent financial year. The most pressing concern for investors is Alithya Group's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Check out our latest analysis for Alithya Group

According to the 4 industry analysts covering Alithya Group, the consensus is that breakeven is near. They expect the company to post a final loss in 2024, before turning a profit of CA$1.1m in 2025. So, the company is predicted to breakeven approximately 12 months 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 105% 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 Alithya Group's upcoming projects, though, bear in mind that generally 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 issue worth mentioning. Alithya Group currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Alithya Group's case is 67%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

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

1. Valuation: What is Alithya Group 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 Alithya Group 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 Alithya Group’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.