Money Forward, Inc. (TSE:3994) Is Expected To Breakeven In The Near Future

With the business potentially at an important milestone, we thought we'd take a closer look at Money Forward, Inc.'s (TSE:3994) future prospects. Money Forward, Inc. provides financial solutions for individuals, financial institutions, and corporations primarily in Japan. The JP¥358b market-cap company’s loss lessened since it announced a JP¥6.3b loss in the full financial year, compared to the latest trailing-twelve-month loss of JP¥5.9b, as it approaches breakeven. As path to profitability is the topic on Money Forward'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.

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

According to the 9 industry analysts covering Money Forward, the consensus is that breakeven is near. They expect the company to post a final loss in 2025, before turning a profit of JP¥2.1b in 2026. The company is therefore projected 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 64% is expected, which is extremely buoyant. 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 Money Forward's upcoming projects, however, bear in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

View our latest analysis for Money Forward

Before we wrap up, there’s one issue worth mentioning. Money Forward currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Money Forward's case is 66%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Money Forward, so if you are interested in understanding the company at a deeper level, take a look at Money Forward's company page on Simply Wall St. We've also put together a list of relevant aspects you should look at:

1. Valuation: What is Money Forward 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 Money Forward 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 Money Forward’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.