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Wisr Limited's (ASX:WZR): Wisr Limited engages in the lending business in Australia. The company’s loss has recently broadened since it announced a AU$7.7m loss in the full financial year, compared to the latest trailing-twelve-month loss of AU$17.1m, moving it further away from breakeven. As path to profitability is the topic on WZR’s investors mind, I’ve decided to gauge market sentiment. Below I will provide a high-level summary of the industry analysts’ expectations for WZR.
According to the 3 industry analysts covering WZR, the consensus is breakeven is near. They expect the company to post a final loss in 2022, before turning a profit of AU$14m in 2023. So, WZR is predicted to breakeven approximately 3 years from today. How fast will WZR 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 71% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, WZR may become profitable much later than analysts predict.
Underlying developments driving WZR’s growth isn’t the focus of this broad overview, though, bear 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 I wrap up, there’s one issue worth mentioning. WZR currently has a debt-to-equity ratio of over 2x. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in WZR’s case, it has significantly overshot. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.
This article is not intended to be a comprehensive analysis on WZR, so if you are interested in understanding the company at a deeper level, take a look at WZR’s company page on Simply Wall St. I’ve also put together a list of relevant aspects you should look at:
Historical Track Record: What has WZR'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 back ground.
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.
This article by Simply Wall St is general in nature. 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.
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