With the business potentially at an important milestone, we thought we'd take a closer look at Harvest Technology Group Limited's (ASX:HTG) future prospects. Harvest Technology Group Limited develops and delivers proprietary software, products and services that enables the secure encrypted transfer of data in Australia, the United States, and the United Kingdom. The AU$38m market-cap company posted a loss in its most recent financial year of AU$14m and a latest trailing-twelve-month loss of AU$11m shrinking the gap between loss and breakeven. The most pressing concern for investors is Harvest Technology Group'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.
View our latest analysis for Harvest Technology Group
Expectations from some of the Australian Electronic analysts is that Harvest Technology Group is on the verge of breakeven. They expect the company to post a final loss in 2023, before turning a profit of AU$4.4m in 2024. So, the company is predicted to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 166% 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.
Underlying developments driving Harvest Technology Group's growth isn’t the focus of this broad overview, though, bear in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing we would like to bring into light with Harvest Technology Group is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Harvest Technology Group's case is 47%. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.
Next Steps:
There are too many aspects of Harvest Technology Group to cover in one brief article, but the key fundamentals for the company can all be found in one place – Harvest Technology Group's company page on Simply Wall St. We've also put together a list of key aspects you should further examine:
01.Valuation: What is Harvest Technology Group 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 Harvest Technology Group is currently mispriced by the market.
02.Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Harvest Technology Group’s board and the CEO’s background.
03.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.
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