VerticalScope Holdings Inc.'s (TSE:FORA) Profit Outlook

VerticalScope Holdings Inc. (TSE:FORA) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. 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. The CA$102m market-cap company posted a loss in its most recent financial year of US$25m and a latest trailing-twelve-month loss of US$6.9m shrinking the gap between loss and breakeven. 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.

View our latest analysis for VerticalScope Holdings

VerticalScope Holdings is bordering on breakeven, according to the 8 Canadian Interactive Media and Services analysts. They expect the company to post a final loss in 2024, before turning a profit of US$2.4m in 2025. So, the company is predicted to breakeven approximately 2 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 71% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for VerticalScope Holdings given that this is a high-level summary, however, keep in mind that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one issue worth mentioning. VerticalScope Holdings currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in VerticalScope Holdings' case is 80%. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

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

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.

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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.