Loss-Making VerticalScope Holdings Inc. (TSE:FORA) Expected To Breakeven In The Medium-Term

We feel now is a pretty good time to analyse VerticalScope Holdings Inc.'s (TSE:FORA) business as it appears the company may be on the cusp of a considerable accomplishment. VerticalScope Holdings Inc., a technology company, operates a cloud-based digital community platform for online enthusiast communities in the United States, Canada, the United Kingdom, and internationally. With the latest financial year loss of US$16k and a trailing-twelve-month loss of US$1.4m, the CA$89m market-cap company amplified its loss by moving further away from its breakeven target. Many investors are wondering about the rate at which VerticalScope Holdings will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit.

Consensus from 8 of the Canadian Interactive Media and Services analysts is that VerticalScope Holdings is on the verge of breakeven. They expect the company to post a final loss in 2025, before turning a profit of US$2.3m in 2026. So, the company is predicted to breakeven just over a year 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 75% is expected, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of VerticalScope Holdings' upcoming projects, however, bear in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Check out our latest analysis for VerticalScope Holdings

Before we wrap up, there’s one issue worth mentioning. VerticalScope Holdings currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in VerticalScope Holdings' case is 51%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

There are too many aspects of VerticalScope Holdings to cover in one brief article, but the key fundamentals for the company can all be found in one place – VerticalScope Holdings' company page on Simply Wall St. We've also put together a list of pertinent factors you should further examine:

1. Valuation: What is VerticalScope Holdings 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 VerticalScope Holdings 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 VerticalScope Holdings’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.

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

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.