We feel now is a pretty good time to analyse Felix Group Holdings Ltd's (ASX:FLX) business as it appears the company may be on the cusp of a considerable accomplishment. Felix Group Holdings Ltd engages in the development and sale of cloud-based SaaS solutions for contractors and vendors in Australia and New Zealand. The AU$20m market-cap company announced a latest loss of AU$7.6m on 30 June 2022 for its most recent financial year result. Many investors are wondering about the rate at which Felix Group Holdings 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.

Check out our latest analysis for Felix Group Holdings

Expectations from some of the Australian Software analysts is that Felix Group Holdings is on the verge of breakeven. They anticipate the company to incur a final loss in 2024, before generating positive profits of AU$1.3m in 2025. The company is therefore projected to breakeven around 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 67% 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.

Given this is a high-level overview, we won’t go into details of Felix Group Holdings' upcoming projects, though, keep in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we’d like to point out is that Felix Group Holdings has no debt on its balance sheet, which is rare for a loss-making 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.

Next Steps:

This article is not intended to be a comprehensive analysis on Felix Group Holdings, so if you are interested in understanding the company at a deeper level, take a look at Felix Group Holdings' company page on Simply Wall St. We've also compiled a list of pertinent factors you should further examine:

1. Valuation: What is Felix Group Holdings 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 Felix Group Holdings is currently mispriced by the market.

2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Felix Group Holdings’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.

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