We feel now is a pretty good time to analyse Tesserent Limited's (ASX:TNT) business as it appears the company may be on the cusp of a considerable accomplishment. Tesserent Limited provides cyber security consulting, cloud, and managed services in Australia and internationally. The AU$176m market-cap company announced a latest loss of AU$8.8m on 30 June 2022 for its most recent financial year result. Many investors are wondering about the rate at which Tesserent 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 Tesserent
Tesserent is bordering on breakeven, according to some Australian Software analysts. They expect the company to post a final loss in 2022, before turning a profit of AU$12m in 2023. Therefore, the company is expected to breakeven roughly 12 months from now or less. We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 59% is expected, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Given this is a high-level overview, we won’t go into details of Tesserent's upcoming projects, but, bear in mind that generally 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 The company has managed its capital judiciously, with debt making up 29% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on Tesserent, so if you are interested in understanding the company at a deeper level, take a look at Tesserent's company page on Simply Wall St. We've also put together a list of key factors you should further research:
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Valuation: What is Tesserent 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 Tesserent 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 Tesserent’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.