With the business potentially at an important milestone, we thought we'd take a closer look at Diginex Limited's (NASDAQ:EQOS) future prospects. Diginex Limited, a digital asset financial services and advisory company, provides products, architecture, and infrastructure for the financial markets in the areas of digital asset ecosystem in Singapore and internationally. With the latest financial year loss of US$57m and a trailing-twelve-month loss of US$145m, the US$228m market-cap company amplified its loss by moving further away from its breakeven target. Many investors are wondering about the rate at which Diginex 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.
Diginex is bordering on breakeven, according to the 2 American Capital Markets analysts. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$7.6m in 2023. So, the company is predicted to breakeven approximately 2 years from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 61% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Underlying developments driving Diginex's growth isn’t the focus of this broad overview, but, 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 aspect worth mentioning. Diginex currently has no debt on its balance sheet, which is rare for a loss-making growth company, which usually has a high level of 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:
There are key fundamentals of Diginex 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 Diginex, take a look at Diginex's company page on Simply Wall St. We've also compiled a list of pertinent factors you should further examine:
- Historical Track Record: What has Diginex'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 Diginex'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.
This article by Simply Wall St is general in nature. 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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