Analysts Expect Breakeven For VTEX (NYSE:VTEX) Before Long

VTEX (NYSE:VTEX) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. VTEX provides software-as-a-service digital commerce platform for enterprise brands and retailers. The US$1.0b market-cap company’s loss lessened since it announced a US$52m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$26m, as it approaches breakeven. Many investors are wondering about the rate at which VTEX will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

View our latest analysis for VTEX

According to the 9 industry analysts covering VTEX, the consensus is that breakeven is near. They expect the company to post a final loss in 2023, before turning a profit of US$4.8m in 2024. 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 113% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving VTEX's growth isn’t the focus of this broad overview, but, take into account that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we’d like to point out is that VTEX has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which typically has high debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

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

1. Valuation: What is VTEX 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 VTEX 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 VTEX’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.