Prenetics Global Limited's (NASDAQ:PRE) Profit Outlook

Prenetics Global Limited (NASDAQ:PRE) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Prenetics Global Limited, an investment holding company, operates as a diagnostics and genetic testing company. The US$356m market-cap company posted a loss in its most recent financial year of US$174m and a latest trailing-twelve-month loss of US$343m leading to an even wider 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.

Our analysis indicates that PRE is potentially overvalued!

Consensus from 2 of the American Biotechs analysts is that Prenetics Global is on the verge of breakeven. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$820k in 2024. So, the company is predicted to breakeven approximately 2 years from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 84%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Prenetics Global's growth isn’t the focus of this broad overview, but, take into account that by and large a biotech has lumpy cash flows which are contingent on the product type 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 prudently, with debt making up 4.2% 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 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 essential 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.