Convey Health Solutions Holdings, Inc. (NYSE:CNVY) Has Found A Path To Profitability

By
Simply Wall St
Published
March 26, 2022
NYSE:CNVY
Source: Shutterstock

With the business potentially at an important milestone, we thought we'd take a closer look at Convey Health Solutions Holdings, Inc.'s (NYSE:CNVY) future prospects. Convey Holding Parent, Inc., together with its subsidiaries, provides technology enabled solutions and advisory services to assist its clients with workflows across product developments, sales, member experience, clinical management, core operations, and business intelligence and analytics in the United States. The US$470m market-cap company announced a latest loss of US$10.0m on 31 December 2021 for its most recent financial year result. As path to profitability is the topic on Convey Health Solutions Holdings' 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 Convey Health Solutions Holdings

Convey Health Solutions Holdings is bordering on breakeven, according to the 4 American Healthcare Services analysts. They expect the company to post a final loss in 2021, before turning a profit of US$23m in 2022. So, the company is predicted to breakeven approximately 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 64% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

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NYSE:CNVY Earnings Per Share Growth March 26th 2022

Given this is a high-level overview, we won’t go into details of Convey Health Solutions Holdings' upcoming projects, though, take into account that generally healthcare tech companies, depending on the stage of product development, have irregular periods of cash flow. 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 35% 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:

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

  1. Valuation: What is Convey Health Solutions Holdings 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 Convey Health Solutions Holdings 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 Convey Health Solutions Holdings’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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