We feel now is a pretty good time to analyse ReadCloud Limited's (ASX:RCL) business as it appears the company may be on the cusp of a considerable accomplishment. ReadCloud Limited provides eLearning software and industry-based training solutions to schools and educational institutions in Australia. With the latest financial year loss of AU$2.3m and a trailing-twelve-month loss of AU$1.6m, the AU$15m market-cap company alleviated its loss by moving closer towards its target of breakeven. As path to profitability is the topic on ReadCloud'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.

See our latest analysis for ReadCloud

Expectations from some of the Australian Software analysts is that ReadCloud is on the verge of breakeven. They expect the company to post a final loss in 2025, before turning a profit of AU$700k in 2026. The company is therefore projected to breakeven around 2 years from today. 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 90% is expected, which is rather optimistic! 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 ReadCloud given that this is a high-level summary, however, bear 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. ReadCloud currently has no debt on its balance sheet, which is quite unusual for a cash-burning 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 too many aspects of ReadCloud to cover in one brief article, but the key fundamentals for the company can all be found in one place – ReadCloud's company page on Simply Wall St. We've also put together a list of relevant factors you should look at:

1. Valuation: What is ReadCloud 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 ReadCloud 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 ReadCloud’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.

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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.