Eqonex Limited (NASDAQ:EQOS) Is Expected To Breakeven In The Near Future
Eqonex Limited (NASDAQ:EQOS) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Eqonex Limited operates as a digital assets financial services company. On 31 March 2022, the US$23m market-cap company posted a loss of US$75m for its most recent financial year. Many investors are wondering about the rate at which Eqonex will turn a profit, with the big question being “when will the company 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 Eqonex
Consensus from 2 of the American Capital Markets analysts is that Eqonex is on the verge of breakeven. They expect the company to post a final loss in 2024, before turning a profit of US$16m in 2025. So, the company is predicted to breakeven approximately 3 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 101% year-on-year, on average, which is extremely buoyant. 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 Eqonex given that this is a high-level summary, but, 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.
Before we wrap up, there’s one issue worth mentioning. Eqonex currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Eqonex's case is 90%. Note that a higher debt obligation increases the risk in investing in the loss-making company.
Next Steps:
There are key fundamentals of Eqonex which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Eqonex, take a look at Eqonex's company page on Simply Wall St. We've also compiled a list of relevant aspects you should further examine:
Historical Track Record: What has Eqonex'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.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Eqonex's board and the CEO’s background.
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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