Hipages Group Holdings Limited (ASX:HPG) Has Found A Path To Profitability

Hipages Group Holdings Limited (ASX:HPG) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Hipages Group Holdings Limited, together with its subsidiaries, operates as an online tradie marketplace and software as a service (SaaS) provider in Australia and New Zealand. On 30 June 2023, the AU$104m market-cap company posted a loss of AU$5.1m for its most recent financial year. The most pressing concern for investors is Hipages Group Holdings' 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.

See our latest analysis for Hipages Group Holdings

According to the 5 industry analysts covering Hipages Group Holdings, the consensus is that breakeven is near. They expect the company to post a final loss in 2023, before turning a profit of AU$1.0m in 2024. Therefore, the company is expected to breakeven roughly a year from now or less! How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 53% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won’t go into details of Hipages Group Holdings' upcoming projects, however, bear in mind that by and large 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 Hipages Group Holdings has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which typically has high 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:

This article is not intended to be a comprehensive analysis on Hipages Group Holdings, so if you are interested in understanding the company at a deeper level, take a look at Hipages Group Holdings' company page on Simply Wall St. We've also put together a list of key factors you should look at:

1. Valuation: What is Hipages Group 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 Hipages Group Holdings 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 Hipages Group Holdings’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.