Analysts Expect Breakeven For ClouDr Group Limited (HKG:9955) Before Long

With the business potentially at an important milestone, we thought we'd take a closer look at ClouDr Group Limited's (HKG:9955) future prospects. ClouDr Group Limited, an investment holding company, provides supplies and software as a service (SaaS) to hospitals and pharmacies, digital marketing services to pharmaceutical companies, and online consultation and prescriptions for patients with chronic condition management. On 31 December 2023, the HK$1.1b market-cap company posted a loss of CN¥323m for its most recent financial year. As path to profitability is the topic on ClouDr Group's investors mind, we've decided to gauge market sentiment. 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 ClouDr Group

According to the 4 industry analysts covering ClouDr Group, the consensus is that breakeven is near. They expect the company to post a final loss in 2024, before turning a profit of CN¥71m in 2025. Therefore, the company is expected to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 125% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for ClouDr Group given that this is a high-level summary, but, take into account that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 25% 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 ClouDr Group to cover in one brief article, but the key fundamentals for the company can all be found in one place – ClouDr Group's company page on Simply Wall St. We've also put together a list of relevant aspects you should further examine:

1. Historical Track Record: What has ClouDr Group'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 ClouDr 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com