Nearmap Ltd (ASX:NEA): Are Analysts Optimistic?

We feel now is a pretty good time to analyse Nearmap Ltd's (ASX:NEA) business as it appears the company may be on the cusp of a considerable accomplishment. Nearmap Ltd provides online aerial photomaps in Australia, New Zealand, and North America. With the latest financial year loss of AU$37m and a trailing-twelve-month loss of AU$27m, the AU$1.1b market-cap company alleviated its loss by moving closer towards its target of breakeven. The most pressing concern for investors is Nearmap'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.

View our latest analysis for Nearmap

Nearmap is bordering on breakeven, according to the 6 Australian Software analysts. They anticipate the company to incur a final loss in 2023, before generating positive profits of AU$32m in 2024. The company is therefore projected to breakeven around 3 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 62% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Nearmap's growth isn’t the focus of this broad overview, however, take into account 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. Nearmap currently has no debt on its balance sheet, which is quite unusual for a cash-burning 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:

There are key fundamentals of Nearmap which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Nearmap, take a look at Nearmap's company page on Simply Wall St. We've also compiled a list of pertinent aspects you should look at:

1. Valuation: What is Nearmap 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 Nearmap 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 Nearmap’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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