Wrkr Ltd (ASX:WRK): Are Analysts Optimistic?

With the business potentially at an important milestone, we thought we'd take a closer look at Wrkr Ltd's (ASX:WRK) future prospects. wrkr Ltd provides software as a service to solve compliance needs for companies to process pay, superannuation and SMSF contributions, onboard new staff and contractors, and check credentials of new employees and contractors in Australia. The company’s loss has recently broadened since it announced a AU$4.2m loss in the full financial year, compared to the latest trailing-twelve-month loss of AU$4.4m, moving it further away from breakeven. The most pressing concern for investors is Wrkr'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 Wrkr

Consensus from 2 of the Australian IT analysts is that Wrkr is on the verge of breakeven. They expect the company to post a final loss in 2024, before turning a profit of AU$400k in 2025. 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 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 88% year-on-year, on average, 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 Wrkr's growth isn’t the focus of this broad overview, however, keep in mind that generally 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. The company has managed its capital prudently, with debt making up 2.8% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Wrkr 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 Wrkr, take a look at Wrkr's company page on Simply Wall St. We've also put together a list of key factors you should further examine:

1. Valuation: What is Wrkr 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 Wrkr 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 Wrkr’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.

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