When Can We Expect A Profit From Kooth plc (LON:KOO)?

We feel now is a pretty good time to analyse Kooth plc's (LON:KOO) business as it appears the company may be on the cusp of a considerable accomplishment. Kooth plc, together with its subsidiaries, provides digital mental health services to children, young people, and adults in the United Kingdom. On 31 December 2022, the UK£114m market-cap company posted a loss of UK£716k for its most recent financial year. As path to profitability is the topic on Kooth's 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 Kooth

According to the 2 industry analysts covering Kooth, the consensus is that breakeven is near. They expect the company to post a final loss in 2023, before turning a profit of UK£100k in 2024. Therefore, the company is expected to breakeven just over a year 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 -7.1% year-on-year, on average,

Given this is a high-level overview, we won’t go into details of Kooth's upcoming projects, but, keep in mind that typically a low or volatile growth rate in the near future is not unusual, especially if the company is currently in an investment period.

Before we wrap up, there’s one aspect worth mentioning. Kooth currently has no debt on its balance sheet, which is rare for a loss-making growth company, which typically has high debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

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

1. Historical Track Record: What has Kooth's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Kooth'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.