When Can We Expect A Profit From AvidXchange Holdings, Inc. (NASDAQ:AVDX)?

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. The US$2.5b market-cap company’s loss lessened since it announced a US$47m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$32m, as it approaches breakeven. The most pressing concern for investors is AvidXchange Holdings' path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Check out our latest analysis for AvidXchange Holdings

AvidXchange Holdings is bordering on breakeven, according to the 14 American Diversified Financial analysts. They expect the company to post a final loss in 2024, before turning a profit of US$31m in 2025. The company is therefore projected to breakeven just over a year from now. 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 70% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won’t go into details of AvidXchange Holdings' upcoming projects, but, 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 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 key fundamentals of AvidXchange 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 AvidXchange Holdings, take a look at AvidXchange Holdings' company page on Simply Wall St. We've also compiled a list of pertinent aspects you should further examine:

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.

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