With the business potentially at an important milestone, we thought we'd take a closer look at Bubs Australia Limited's (ASX:BUB) future prospects. Bubs Australia Limited, together with its subsidiaries, engages in the manufacture and sale of various infant nutrition and wellbeing products in Australia, China, the United States, and internationally. The AU$138m market-cap company posted a loss in its most recent financial year of AU$21m and a latest trailing-twelve-month loss of AU$9.8m shrinking the gap between loss and breakeven. Many investors are wondering about the rate at which Bubs Australia will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.
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Bubs Australia is bordering on breakeven, according to the 3 Australian Food analysts. They anticipate the company to incur a final loss in 2025, before generating positive profits of AU$4.8m in 2026. Therefore, the company is expected to breakeven just over a year from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 77%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving Bubs Australia's growth isn’t the focus of this broad overview, though, keep in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Check out our latest analysis for Bubs Australia
One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 13% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
There are too many aspects of Bubs Australia to cover in one brief article, but the key fundamentals for the company can all be found in one place – Bubs Australia's company page on Simply Wall St. We've also put together a list of essential factors you should further research:
Discover if Bubs Australia might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
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