Breakeven On The Horizon For Wisr Limited (ASX:WZR)

We feel now is a pretty good time to analyse Wisr Limited's (ASX:WZR) business as it appears the company may be on the cusp of a considerable accomplishment. Wisr Limited engages in the lending business in Australia. With the latest financial year loss of AU$20m and a trailing-twelve-month loss of AU$20m, the AU$52m market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which Wisr 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.

View our latest analysis for Wisr

Wisr is bordering on breakeven, according to some Australian Consumer Finance analysts. They anticipate the company to incur a final loss in 2023, before generating positive profits of AU$827k in 2024. Therefore, the company is expected to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 115% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for Wisr given that this is a high-level summary, though, keep in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we would like to bring into light with Wisr is its debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

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

1. Historical Track Record: What has Wisr'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 Wisr'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.