Keypath Education International, Inc. (ASX:KED) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Keypath Education International, Inc. designs, develops, and delivers career-relevant online education solutions in North America, Australia, Malaysia, the United Kingdom, and internationally. The company’s loss has recently broadened since it announced a US$79m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$88m, moving it further away from breakeven. The most pressing concern for investors is Keypath Education International's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
According to the 3 industry analysts covering Keypath Education International, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$12m in 2025. Therefore, the company is expected to breakeven roughly 3 years from now. 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 58% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving Keypath Education International'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. Keypath Education International currently has no debt on its balance sheet, which is quite unusual for a cash-burning 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.
There are too many aspects of Keypath Education International to cover in one brief article, but the key fundamentals for the company can all be found in one place – Keypath Education International's company page on Simply Wall St. We've also compiled a list of key aspects you should further research:
Valuation: What is Keypath Education International 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 Keypath Education International is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Keypath Education International’s board and the CEO’s background.
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.