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With the business potentially at an important milestone, we thought we'd take a closer look at Gratifii Limited's (ASX:GTI) future prospects. Gratifii Limited, a technology company, together with its subsidiaries, designs and develops loyalty and rewards programs in Australia, New Zealand, South Africa, and Singapore. The AU$8.8m market-cap company announced a latest loss of AU$11m on 30 June 2024 for its most recent financial year result. The most pressing concern for investors is Gratifii's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
Check out our latest analysis for Gratifii
Gratifii is bordering on breakeven, according to some Australian Software analysts. They expect the company to post a final loss in 2025, before turning a profit of AU$1.8m in 2026. The company is therefore projected to breakeven around 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 150% 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.
We're not going to go through company-specific developments for Gratifii given that this is a high-level summary, however, 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 would like to bring into light with Gratifii is its debt-to-equity ratio of 127%. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk in investing in the loss-making company.
Next Steps:
There are too many aspects of Gratifii to cover in one brief article, but the key fundamentals for the company can all be found in one place – Gratifii's company page on Simply Wall St. We've also put together a list of essential factors you should look at:
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Valuation: What is Gratifii 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 Gratifii 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 Gratifii’s board and the CEO’s background.
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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.
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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.