Market Sentiment Around Loss-Making RedCloud Holdings plc (NASDAQ:RCT)

We feel now is a pretty good time to analyse RedCloud Holdings plc's (NASDAQ:RCT) business as it appears the company may be on the cusp of a considerable accomplishment. RedCloud Holdings plc operates a cloud based business-to-business open commerce platform primarily in Argentina, the United Kingdom, Brazil, Nigeria, South Africa, and internationally. On 31 December 2024, the US$54m market-cap company posted a loss of US$51m for its most recent financial year. The most pressing concern for investors is RedCloud 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.

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According to the 2 industry analysts covering RedCloud Holdings, the consensus is that breakeven is near. They expect the company to post a final loss in 2025, before turning a profit of US$5.2m in 2026. Therefore, the company is expected 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 124% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for RedCloud Holdings given that this is a high-level summary, though, bear in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

See our latest analysis for RedCloud Holdings

Before we wrap up, there’s one issue worth mentioning. RedCloud Holdings currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. These losses tend to occur only on paper, however, in other cases it can be forewarning.

Next Steps:

There are key fundamentals of RedCloud 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 RedCloud Holdings, take a look at RedCloud Holdings' company page on Simply Wall St. We've also put together a list of important factors you should further research:

1. Valuation: What is RedCloud Holdings 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 RedCloud Holdings 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 RedCloud Holdings’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.