Analysts Expect Breakeven For Definitive Healthcare Corp. (NASDAQ:DH) Before Long

We feel now is a pretty good time to analyse Definitive Healthcare Corp.'s (NASDAQ:DH) business as it appears the company may be on the cusp of a considerable accomplishment. Definitive Healthcare Corp., together with its subsidiaries, provides software as a service (SaaS) healthcare commercial intelligence platform in the United States and internationally. With the latest financial year loss of US$202m and a trailing-twelve-month loss of US$200m, the US$613m market-cap company alleviated its loss by moving closer towards its target of breakeven. The most pressing concern for investors is Definitive Healthcare'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.

View our latest analysis for Definitive Healthcare

Consensus from 12 of the American Healthcare Services analysts is that Definitive Healthcare is on the verge of breakeven. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$41m in 2026. Therefore, the company is expected to breakeven roughly 2 years from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 96% 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 Definitive Healthcare's upcoming projects, though, bear in mind that typically a healthcare tech company has lumpy cash flows which are contingent on the product and stage of development the company is in. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 21% 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 key fundamentals of Definitive Healthcare which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Definitive Healthcare, take a look at Definitive Healthcare's company page on Simply Wall St. We've also put together a list of key aspects you should further research:

1. Valuation: What is Definitive Healthcare 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 Definitive Healthcare 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 Definitive Healthcare’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