Analysts Expect Breakeven For Wisr Limited (ASX:WZR) Before Long
Wisr Limited (ASX:WZR) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Wisr Limited engages in the lending business in Australia. On 30 June 2021, the AU$298m market-cap company posted a loss of AU$18m for its most recent financial year. The most pressing concern for investors is Wisr's 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.
See our latest analysis for Wisr
Expectations from some of the Australian Consumer Finance analysts is that Wisr is on the verge of breakeven. They expect the company to post a final loss in 2022, before turning a profit of AU$19m in 2023. The company is therefore projected to breakeven around 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 95% 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 Wisr given that this is a high-level summary, but, keep in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before we wrap up, there’s one issue worth mentioning. Wisr currently has a debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk around investing in the loss-making company.
Next Steps:
There are key fundamentals of Wisr 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 Wisr, take a look at Wisr's company page on Simply Wall St. We've also put together a list of key aspects you should further research:
Historical Track Record: What has Wisr's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Wisr's board and the CEO’s background.
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.
