Credit Clear Limited's (ASX:CCR) Shift From Loss To Profit

Credit Clear Limited (ASX:CCR) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Credit Clear Limited engages in the development and implementation of receivables management platform, and provision of receivable collection services. With the latest financial year loss of AU$11m and a trailing-twelve-month loss of AU$5.9m, the AU$104m market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which Credit Clear will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

See our latest analysis for Credit Clear

Credit Clear is bordering on breakeven, according to some Australian Software analysts. They anticipate the company to incur a final loss in 2024, before generating positive profits of AU$300k in 2025. The company is therefore projected to breakeven just over a year 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 107%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

earnings-per-share-growth

Given this is a high-level overview, we won’t go into details of Credit Clear's upcoming projects, but, keep in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 1.1% 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:

There are too many aspects of Credit Clear to cover in one brief article, but the key fundamentals for the company can all be found in one place – Credit Clear's company page on Simply Wall St. We've also put together a list of pertinent factors you should further examine:

1. Valuation: What is Credit Clear 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 Credit Clear 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 Credit Clear’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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com