Smartsheet Inc. (NYSE:SMAR): Is Breakeven Near?

With the business potentially at an important milestone, we thought we'd take a closer look at Smartsheet Inc.'s (NYSE:SMAR) future prospects. Smartsheet Inc. provides enterprise platform to plan, capture, manage, automate, and report on work for teams and organizations. The US$6.9b market-cap company posted a loss in its most recent financial year of US$105m and a latest trailing-twelve-month loss of US$84m shrinking the gap between loss and breakeven. Many investors are wondering about the rate at which Smartsheet 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 Smartsheet

Smartsheet is bordering on breakeven, according to the 21 American Software analysts. They anticipate the company to incur a final loss in 2026, before generating positive profits of US$35m in 2027. The company is therefore projected to breakeven around 3 years 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 55% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Smartsheet's growth isn’t the focus of this broad overview, but, take into account that by and large 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 Smartsheet has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which usually has a high level of 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 Smartsheet 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 Smartsheet, take a look at Smartsheet's company page on Simply Wall St. We've also compiled a list of key aspects you should further examine:

1. Valuation: What is Smartsheet 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 Smartsheet 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 Smartsheet’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.