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Cambridge Cognition Holdings Plc (LON:COG) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Cambridge Cognition Holdings Plc, a neuroscience technology company, develops digital health solutions in the United States, United Kingdom, the European Union, and internationally. The UK£55m market-cap company announced a latest loss of UK£438k on 31 December 2020 for its most recent financial year result. Many investors are wondering about the rate at which Cambridge Cognition 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.
Cambridge Cognition Holdings is bordering on breakeven, according to some British Healthcare Services analysts. They anticipate the company to incur a final loss in 2020, before generating positive profits of UK£100k in 2021. 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 130% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Underlying developments driving Cambridge Cognition Holdings' growth isn’t the focus of this broad overview, however, keep in mind that by and large healthcare tech companies, depending on the stage of product development, have irregular periods of cash flow. So, 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 Cambridge Cognition Holdings has no debt on its balance sheet, which is rare for a loss-making healthcare tech 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.
This article is not intended to be a comprehensive analysis on Cambridge Cognition Holdings, so if you are interested in understanding the company at a deeper level, take a look at Cambridge Cognition Holdings' company page on Simply Wall St. We've also compiled a list of essential factors you should further research:
Valuation: What is Cambridge Cognition 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 Cambridge Cognition Holdings is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Cambridge Cognition Holdings’s board and the CEO’s background.
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.
This article by Simply Wall St is general in nature. 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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