Analysts Expect Breakeven For Rent.com.au Limited (ASX:RNT) Before Long

With the business potentially at an important milestone, we thought we'd take a closer look at Rent.com.au Limited's (ASX:RNT) future prospects. Rent.com.au Limited operates a rental property website that focuses on rental property market in Australia. On 30 June 2023, the AU$10m market-cap company posted a loss of AU$3.8m for its most recent financial year. The most pressing concern for investors is Rent.com.au's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

Check out our latest analysis for Rent.com.au

Rent.com.au is bordering on breakeven, according to some Australian Interactive Media and Services analysts. They expect the company to post a final loss in 2024, before turning a profit of AU$200k 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 96%, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Rent.com.au's growth isn’t the focus of this broad overview, but, 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.

Before we wrap up, there’s one aspect worth mentioning. Rent.com.au currently has no debt on its balance sheet, which is rare for a loss-making growth company, which typically has high 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:

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

1. Valuation: What is Rent.com.au 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 Rent.com.au 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 Rent.com.au’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.

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

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.