EverCommerce Inc. (NASDAQ:EVCM) Has Found A Path To Profitability

With the business potentially at an important milestone, we thought we'd take a closer look at EverCommerce Inc.'s (NASDAQ:EVCM) future prospects. EverCommerce Inc., together with its subsidiaries, provides integrated software-as-a-service solutions for service-based small and medium sized businesses in the United States and internationally. The company’s loss has recently broadened since it announced a US$46m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$52m, moving it further away from breakeven. As path to profitability is the topic on EverCommerce's investors mind, we've decided to gauge market sentiment. 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 EverCommerce

According to the 9 industry analysts covering EverCommerce, the consensus is that breakeven is near. They expect the company to post a final loss in 2024, before turning a profit of US$2.9m in 2025. The company is therefore projected to breakeven around 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 116% year-on-year, on average, 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 EverCommerce given that this is a high-level summary, however, keep in mind that generally 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 issue worth mentioning. EverCommerce currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in EverCommerce's case is 70%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

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

1. Valuation: What is EverCommerce 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 EverCommerce 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 EverCommerce’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.