When Will Beforepay Group Limited (ASX:B4P) Breakeven?

Beforepay Group Limited (ASX:B4P) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Beforepay Group Limited engages in the provision of pay-on-demand services through mobile applications in Australia. The AU$25m market-cap company posted a loss in its most recent financial year of AU$6.6m and a latest trailing-twelve-month loss of AU$23k shrinking the gap between loss and breakeven. As path to profitability is the topic on Beforepay Group's 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.

See our latest analysis for Beforepay Group

Consensus from 2 of the Australian Consumer Finance analysts is that Beforepay Group is on the verge of breakeven. They expect the company to post a final loss in 2024, before turning a profit of AU$856k in 2025. So, the company is predicted 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 16% year-on-year, on average, which is relatively reasonable. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth

Given this is a high-level overview, we won’t go into details of Beforepay Group's upcoming projects, however, bear in mind that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we would like to bring into light with Beforepay Group is its debt-to-equity ratio of 107%. Typically, debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Beforepay Group 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 Beforepay Group, take a look at Beforepay Group's company page on Simply Wall St. We've also compiled a list of relevant factors you should further research:

1. Historical Track Record: What has Beforepay 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 Beforepay 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.

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

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