We Might See A Profit From Payfare Inc. (TSE:PAY) Soon

With the business potentially at an important milestone, we thought we'd take a closer look at Payfare Inc.'s (TSE:PAY) future prospects. Payfare Inc., a financial technology company, provides instant payout and digital banking solutions to gig economy workers in Canada, the United States, and Mexico. The CA$303m market-cap company announced a latest loss of CA$2.9m on 31 December 2022 for its most recent financial year result. As path to profitability is the topic on Payfare's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for Payfare

Payfare is bordering on breakeven, according to the 5 Canadian Diversified Financial analysts. They anticipate the company to incur a final loss in 2022, before generating positive profits of CA$17m in 2023. So, the company is predicted to breakeven approximately 12 months from now or less. At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 99%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won’t go into details of Payfare's upcoming projects, though, 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 Payfare has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which usually has a high level of 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 Payfare 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 Payfare, take a look at Payfare's company page on Simply Wall St. We've also compiled a list of key aspects you should look at:

1. Historical Track Record: What has Payfare's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Payfare'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.