Analysts Expect Breakeven For LiveHire Limited (ASX:LVH) Before Long

We feel now is a pretty good time to analyse LiveHire Limited's (ASX:LVH) business as it appears the company may be on the cusp of a considerable accomplishment. LiveHire Limited provides online talent acquisition software solutions to enterprises in Australia. On 30 June 2020, the AU$88m market-cap company posted a loss of AU$15m for its most recent financial year. As path to profitability is the topic on LiveHire's investors mind, we've decided to gauge market sentiment. 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 LiveHire

LiveHire is bordering on breakeven, according to some Australian Software analysts. They anticipate the company to incur a final loss in 2022, before generating positive profits of AU$900k in 2023. So, the company is predicted to breakeven approximately 2 years from now. 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 69% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving LiveHire's growth isn’t the focus of this broad overview, but, bear in mind that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we’d like to point out is that LiveHire has no debt on its balance sheet, which is quite unusual for a cash-burning loss-making, growth company, which typically has high debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on LiveHire, so if you are interested in understanding the company at a deeper level, take a look at LiveHire's company page on Simply Wall St. We've also put together a list of pertinent aspects you should look at:

1. Valuation: What is LiveHire 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 LiveHire 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 LiveHire’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. 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.
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