Market Sentiment Around Loss-Making Beforepay Group Limited (ASX:B4P)

Beforepay Group Limited (ASX:B4P) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Beforepay Group Limited engages in the provision of pay-on-demand services through mobile applications in Australia. On 30 June 2023, the AU$21m market-cap company posted a loss of AU$6.6m for its most recent financial year. The most pressing concern for investors is Beforepay Group's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

See our latest analysis for Beforepay Group

According to the 2 industry analysts covering Beforepay Group, the consensus is that breakeven is near. They expect the company to post a final loss in 2024, before turning a profit of AU$50k in 2025. The company is therefore projected to breakeven around 2 years from now. 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 75%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for Beforepay Group given that this is a high-level summary, though, keep in mind that typically 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 issue worth mentioning. Beforepay Group currently has a debt-to-equity ratio of 124%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

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

1. Historical Track Record: What has Beforepay Group's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.

2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Beforepay Group'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.