When Will Enlitic, Inc. (ASX:ENL) Become Profitable?

We feel now is a pretty good time to analyse Enlitic, Inc.'s (ASX:ENL) business as it appears the company may be on the cusp of a considerable accomplishment. Enlitic, Inc. operates in the healthcare IT sector in the United States, Europe, and Japan. On 31 December 2023, the AU$15m market-cap company posted a loss of US$16m for its most recent financial year. The most pressing concern for investors is Enlitic'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 Enlitic

Expectations from some of the Australian Healthcare Services analysts is that Enlitic is on the verge of breakeven. They expect the company to post a final loss in 2024, before turning a profit of US$1.1m in 2025. The company is therefore projected to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 94% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

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Given this is a high-level overview, we won’t go into details of Enlitic's upcoming projects, 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.

Before we wrap up, there’s one aspect worth mentioning. Enlitic currently has no debt on its balance sheet, which is quite unusual for a cash-burning healthcare tech 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:

There are key fundamentals of Enlitic which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Enlitic, take a look at Enlitic's company page on Simply Wall St. We've also compiled a list of pertinent aspects you should look at:

1. Valuation: What is Enlitic 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 Enlitic 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 Enlitic’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.

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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.

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