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Catapult Group International Limited's (ASX:CAT): Catapult Group International Limited develops and sells wearable athlete tracking and analytics solutions worldwide. The AU$255m market-cap company announced a latest loss of -AU$12.6m on 30 June 2019 for its most recent financial year result. Many investors are wondering the rate at which CAT will turn a profit, with the big question being “when will the company breakeven?” Below I will provide a high-level summary of the industry analysts’ expectations for CAT.
View our latest analysis for Catapult Group International
According to the 4 industry analysts covering CAT, the consensus is breakeven is near. They expect the company to post a final loss in 2020, before turning a profit of AU$2.7m in 2021. So, CAT is predicted to breakeven approximately 2 years from now. In order to meet this breakeven date, I calculated the rate at which CAT must grow year-on-year. It turns out an average annual growth rate of 97% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, CAT may become profitable much later than analysts predict.
I’m not going to go through company-specific developments for CAT given that this is a high-level summary, though, keep in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before I wrap up, there’s one aspect worth mentioning. CAT currently has no debt on its balance sheet, which is quite unusual for a cash-burning loss-making, growth company, which typically has high debt relative to its equity. CAT currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
Next Steps:
There are too many aspects of CAT to cover in one brief article, but the key fundamentals for the company can all be found in one place – CAT’s company page on Simply Wall St. I’ve also put together a list of important aspects you should further research:
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Valuation: What is CAT 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 CAT is currently mispriced by the market.
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Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Catapult Group International’s board and the CEO’s back ground.
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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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.