Yahoo Finance Orion Health Group Limited (NZE:OHE): Is Breakeven Near?
Orion Health Group Limited’s (NZSE:OHE): Orion Health Group Limited engages in the development, implementation, hosting, sale, and support of software for the healthcare IT market. On 31 March 2018, the NZ$156.21M market-cap posted a loss of -NZ$40.64M for its most recent financial year. The most pressing concern for investors is OHE’s path to profitability – when will it breakeven? Below I will provide a high-level summary of the industry analysts’ expectations for OHE.
View our latest analysis for Orion Health Group
According to the industry analysts covering OHE, breakeven is near. They expect the company to post a final loss in 2019, before turning a profit of NZ$2.69M in 2020. So, OHE is predicted to breakeven approximately 2 years from now. What rate will OHE have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 68.55%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving OHE’s growth isn’t the focus of this broad overview, but, keep in mind that typically a healthcare tech company has lumpy cash flows which are contingent on the product and stage of development the company is in. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
One thing I would like to bring into light with OHE is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in OHE’s case is 71.42%. Note that a higher debt obligation increases the risk in investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on OHE, so if you are interested in understanding the company at a deeper level, take a look at OHE’s company page on Simply Wall St. I’ve also compiled a list of pertinent aspects you should look at:
Valuation: What is OHE 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 OHE 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 Orion Health Group’s board and the CEO’s back ground.
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.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
