Limited Dropsuite (ASX: DSE) may be approaching a major achievement in his company, so we’d like to shed some light on the company. Dropsuite Limited operates a cloud-based software platform worldwide. The AU$116 million market capitalization company announced a final loss of AU$31,000 on December 31, 2021 for its most recent financial year. As the path to profitability is the topic of concern for Dropsuite investors, we decided to gauge the market sentiment. We’ve put together a brief overview of industry analysts’ expectations for the company, its year of profitability and its implied growth rate.
See our latest analysis for Dropsuite
Expectations from some Australian software analysts are that Dropsuite is close to breaking even. They expect the business to make a terminal loss in 2021, before making a profit of A$1.2 million in 2022. Therefore, the business is expected to break even in about a year or so. less ! We calculated the rate at which the business must grow to reach the consensus forecast predicting breakeven within 12 months. It turns out that an average annual growth rate of 61% is expected, which signals a lot of confidence from analysts. If the business grows at a slower pace, it will become profitable later than expected.
The developments underlying Dropsuite’s growth are not the focus of this general overview, but keep in mind that in general, a high expected growth rate is not unusual for a company that is currently going through a period of investment.
One thing we would like to point out is that Dropsuite has zero debt on its balance sheet, which is rare for a loss-making growth company, which typically has high debt to equity ratios. The company currently operates solely on shareholder funding and has no debt, reducing concerns about repayments and making it a less risky investment.
Next steps:
This article is not intended to be a full analysis of Dropsuite, so if you want to understand the company on a deeper level, check out Dropsuite’s company page on Simply Wall St. We’ve also compiled a list of Key factors you should consider in more detail:
- Evaluation: What is Dropsuite worth today? Has future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Dropsuite is currently undervalued by the market.
- Management team: An experienced management team at the helm boosts our confidence in the company – take a look at who sits on the Dropsuite board and the CEO’s background.
- Other High Performing Stocks: Are there other stocks that offer better prospects with a proven track record? Explore our free list of these great stocks here.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.
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