VTEX (NYSE:VTEX) Is About To Turn The Corner

With the business potentially at an important milestone, we thought we'd take a closer look at VTEX's (NYSE:VTEX) future prospects. VTEX provides software-as-a-service digital commerce platform for enterprise brands and retailers. On 31 December 2023, the US$1.6b market-cap company posted a loss of US$14m for its most recent financial year. Many investors are wondering about the rate at which VTEX will turn a profit, with the big question being “when will the company 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 VTEX

VTEX is bordering on breakeven, according to the 8 American Interactive Media and Services analysts. They expect the company to post a final loss in 2023, before turning a profit of US$8.0m in 2024. Therefore, the company is expected to breakeven roughly a year from now or less! We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 85% is expected, which signals high confidence from analysts. 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 VTEX's upcoming projects, but, take into account that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

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:

There are key fundamentals of VTEX 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 VTEX, take a look at VTEX's company page on Simply Wall St. We've also compiled a list of important factors you should further examine:

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.