AvidXchange Holdings, Inc. (NASDAQ:AVDX) About To Shift From Loss To Profit

We feel now is a pretty good time to analyse AvidXchange Holdings, Inc.'s (NASDAQ:AVDX) business as it appears the company may be on the cusp of a considerable accomplishment. AvidXchange Holdings, Inc. provides accounts payable (AP) automation software and payment solutions for middle market businesses and their suppliers in North America. With the latest financial year loss of US$47m and a trailing-twelve-month loss of US$13m, the US$1.7b market-cap company alleviated its loss by moving closer towards its target of breakeven. As path to profitability is the topic on AvidXchange Holdings' 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 AvidXchange Holdings

According to the 15 industry analysts covering AvidXchange Holdings, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$1.4m in 2024. The company is therefore projected to breakeven around 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 77%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for AvidXchange 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 aspect worth mentioning. The company has managed its capital judiciously, with debt making up 11% 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 too many aspects of AvidXchange Holdings to cover in one brief article, but the key fundamentals for the company can all be found in one place – AvidXchange Holdings' 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 AvidXchange Holdings' 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 AvidXchange Holdings' 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.