When Will Prenetics Global Limited (NASDAQ:PRE) Become Profitable?

With the business potentially at an important milestone, we thought we'd take a closer look at Prenetics Global Limited's (NASDAQ:PRE) future prospects. Prenetics Global Limited operates as a diagnostics and genetic testing company in Hong Kong and the United Kingdom. The US$68m market-cap company posted a loss in its most recent financial year of US$190m and a latest trailing-twelve-month loss of US$18m shrinking the gap between loss and breakeven. Many investors are wondering about the rate at which Prenetics Global will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

View our latest analysis for Prenetics Global

According to some industry analysts covering Prenetics Global, breakeven is near. They expect the company to post a final loss in 2024, before turning a profit of US$46m in 2025. The company is therefore projected 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 115% 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.

Underlying developments driving Prenetics Global's growth isn’t the focus of this broad overview, however, keep in mind that generally 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. Prenetics Global currently has no debt on its balance sheet, which is rare for a loss-making growth company, which usually has a high level of debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

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

1. Valuation: What is Prenetics Global 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 Prenetics Global 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 Prenetics Global’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.