SHCR

Loss-Making Sharecare, Inc. (NASDAQ:SHCR) Expected To Breakeven In The Medium-Term

Sharecare, Inc. (NASDAQ:SHCR) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Sharecare, Inc. operates as a digital healthcare platform company. The company’s loss has recently broadened since it announced a US$40m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$41m, moving it further away from breakeven. As path to profitability is the topic on Sharecare's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Consensus from 2 of the American Healthcare Services analysts is that Sharecare is on the verge of breakeven. They expect the company to post a final loss in 2022, before turning a profit of US$32m in 2023. So, the company is predicted to breakeven approximately 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 85% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

earnings-per-share-growth
NasdaqGS:SHCR Earnings Per Share Growth October 5th 2021

Given this is a high-level overview, we won’t go into details of Sharecare's upcoming projects, though, bear in mind that by and large a healthcare tech company has lumpy cash flows which are contingent on the product and stage of development the company is in. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one issue worth mentioning. Sharecare currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. Oftentimes, losses exist only on paper but other times, it can be a red flag.

Next Steps:

There are too many aspects of Sharecare to cover in one brief article, but the key fundamentals for the company can all be found in one place – Sharecare's company page on Simply Wall St. We've also put together a list of important aspects you should look at:

  1. Valuation: What is Sharecare 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 Sharecare is currently mispriced by the market.
  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Sharecare’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.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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