When Will Wishpond Technologies Ltd. (CVE:WISH) Become Profitable?

Wishpond Technologies Ltd. (CVE:WISH) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Wishpond Technologies Ltd. provides marketing focused online business solutions in the United States, Canada, and internationally. The CA$17m market-cap company posted a loss in its most recent financial year of CA$1.9m and a latest trailing-twelve-month loss of CA$1.0m shrinking the gap between loss and breakeven. As path to profitability is the topic on Wishpond Technologies' 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 Wishpond Technologies

Wishpond Technologies is bordering on breakeven, according to the 4 Canadian Software analysts. They anticipate the company to incur a final loss in 2024, before generating positive profits of CA$500k in 2025. The company is therefore projected to breakeven just over a year from today. 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 118% 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 Wishpond Technologies' growth isn’t the focus of this broad overview, though, keep 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.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 14% 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 Wishpond Technologies 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 Wishpond Technologies, take a look at Wishpond Technologies' company page on Simply Wall St. We've also compiled a list of relevant factors you should look at:

1. Valuation: What is Wishpond Technologies 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 Wishpond Technologies 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 Wishpond Technologies’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.