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We think now is a pretty good time for analysis Kooth plc (LON:KOO) the company appears to be on the verge of significant achievement. Kooth plc, together with its subsidiaries, provides digital mental health services to children, young people and adults in the UK. The company, with a market capitalization of £65m, announced a loss of £310,000 on its latest full year results on 31 December 2021. Since the road to profitability is the issue that worries Kooth’s investors, we decided to gauge market sentiment. We’ve compiled a brief overview of what industry analysts expect from the company, the breakeven year and the implied growth rate.
Check out our latest analysis for Kooth
The consensus of 3 of the UK healthcare analysts is that Kooth is close to breaking even. They expect the company to incur a definitive loss in 2023 before posting £50,000 in positive profits in 2024. So the company is expected to break even in about two years from now. How fast does the company need to grow each year to break even by 2024? Looking backwards at analyst estimates, it turns out that they expect the company to grow an average of 7.3% year over year, which is fair. If that rate turns out to be too low, the company could become profitable faster than analysts expected.
The underlying developments driving Kooth’s growth are not the focus of this broad overview. However, keep in mind that a low or volatile growth rate is not usually uncommon in the near future, especially if the company is currently in an investment phase.
One thing we’d like to point out is that Kooth has no debt on its balance sheet, which is fairly unusual for a cash-burning growth company that typically has high levels of debt relative to its equity. The company currently operates solely off of funding from its shareholders and has no debt obligation, reducing concerns about repayments and making it a less risky investment.
Next Steps:
There are important basics of Kooth that are not covered in this article, but we must reiterate that this is just a basic overview. For a more comprehensive look at Kooth, take a look at Kooth’s corporate page on Simply Wall Street. We have also compiled a list of relevant aspects for you to investigate further:
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valuation: What is Kooth worth today? Is the future growth potential already priced in? The intrinsic value infographic in our free research report helps visualize if Kooth is currently mispriced by the market.
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Leadership team: An experienced management team at the helm strengthens our confidence in the company – see who sits on Kooth’s board and the background of the CEO.
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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 of a general nature. We provide comments based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended as financial advice. It is not a recommendation to buy or sell any stock and does not take into account your goals or financial situation. Our goal is to offer you long-term focused analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any of the stocks mentioned.
