When Will WhiteHawk Limited (ASX:WHK) Become Profitable?

With the business potentially at an important milestone, we thought we'd take a closer look at WhiteHawk Limited's (ASX:WHK) future prospects. WhiteHawk Limited operates as an online cybersecurity exchange platform of end-to-end Cyber Risk Software as a Service (SaaS) and Platform as a Service (PaaS) products and services in Australia and the United States. The AU$8.0m market-cap company announced a latest loss of US$2.8m on 31 December 2023 for its most recent financial year result. Many investors are wondering about the rate at which WhiteHawk will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Check out our latest analysis for WhiteHawk

WhiteHawk is bordering on breakeven, according to some Australian Software analysts. They expect the company to post a final loss in 2024, before turning a profit of US$1.7m in 2025. The company is therefore projected to breakeven just over a year from today. 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 132%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving WhiteHawk's growth isn’t the focus of this broad overview, however, keep in mind that generally 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. WhiteHawk currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. Oftentimes, losses exist only on paper but other times, it can be a red flag.

Next Steps:

This article is not intended to be a comprehensive analysis on WhiteHawk, so if you are interested in understanding the company at a deeper level, take a look at WhiteHawk's company page on Simply Wall St. We've also compiled a list of key factors you should further research:

1. Historical Track Record: What has WhiteHawk'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.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on WhiteHawk'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.