Stock Analysis

When Will Whispir Limited (ASX:WSP) Become Profitable?

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ASX:WSP
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Whispir Limited (ASX:WSP) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Whispir Limited develops and provides communications management systems through cloud-based platform in the Americas, Australia, New Zealand, Singapore, Switzerland, and internationally. The AU$328m market-cap company announced a latest loss of AU$9.9m on 30 June 2020 for its most recent financial year result. As path to profitability is the topic on Whispir's investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

View our latest analysis for Whispir

According to the 5 industry analysts covering Whispir, the consensus is that breakeven is near. They expect the company to post a final loss in 2022, before turning a profit of AU$1.6m in 2023. So, the company is predicted to breakeven approximately 3 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 64% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
ASX:WSP Earnings Per Share Growth December 9th 2020

Given this is a high-level overview, we won’t go into details of Whispir's upcoming projects, but, keep in mind that generally 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 Whispir has no debt on its balance sheet, which is rare for a loss-making 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 Whispir, so if you are interested in understanding the company at a deeper level, take a look at Whispir's company page on Simply Wall St. We've also compiled a list of key factors you should further examine:

  1. Valuation: What is Whispir 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 Whispir 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 Whispir’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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Valuation is complex, but we're helping make it simple.

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