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We feel now is a pretty good time to analyse PropTech Group Limited's (ASX:PTG) business as it appears the company may be on the cusp of a considerable accomplishment. PropTech Group Limited invests in, develops, and sells real estate software to real estate agencies and investors through various platforms in Australia, New Zealand, and the United Kingdom. With the latest financial year loss of AU$1.0m and a trailing-twelve-month loss of AU$1.4m, the AU$56m market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on PropTech Group's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
View our latest analysis for PropTech Group
According to some industry analysts covering PropTech Group, breakeven is near. They anticipate the company to incur a final loss in 2023, before generating positive profits of AU$2.4m in 2024. Therefore, the company is expected to breakeven roughly 2 years from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 99%, 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 PropTech Group's growth isn’t the focus of this broad overview, however, take into account that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing we’d like to point out is that PropTech Group has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which usually has a high level of debt relative to its equity. The company 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:
This article is not intended to be a comprehensive analysis on PropTech Group, so if you are interested in understanding the company at a deeper level, take a look at PropTech Group's company page on Simply Wall St. We've also compiled a list of important aspects you should look at:
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Valuation: What is PropTech Group 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 PropTech Group 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 PropTech Group’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.