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We feel now is a pretty good time to analyse Doctor Care Anywhere Group PLC's (ASX:DOC) business as it appears the company may be on the cusp of a considerable accomplishment. Doctor Care Anywhere Group PLC, together with its subsidiaries, provides digital healthcare and development services in the United Kingdom, Australia, and the Republic of Ireland. On 31 December 2023, the AU$24m market-cap company posted a loss of UK£8.2m for its most recent financial year. Many investors are wondering about the rate at which Doctor Care Anywhere Group 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.
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Expectations from some of the Australian Healthcare Services analysts is that Doctor Care Anywhere Group is on the verge of breakeven. They anticipate the company to incur a final loss in 2024, before generating positive profits of UK£5.5m in 2025. Therefore, the company is expected 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 96% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, we won’t go into details of Doctor Care Anywhere Group's upcoming projects, though, bear 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 that a high growth rate is not unusual, especially if the company is currently in an investment period.
Before we wrap up, there’s one issue worth mentioning. Doctor Care Anywhere Group currently has a debt-to-equity ratio of over 2x. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.
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There are key fundamentals of Doctor Care Anywhere 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 Doctor Care Anywhere Group, take a look at Doctor Care Anywhere Group's company page on Simply Wall St. We've also put together a list of essential factors you should further research: