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When Can We Expect A Profit From Whispir Limited (ASX:WSP)?

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·3 min read
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With the business potentially at an important milestone, we thought we'd take a closer look at Whispir Limited's (ASX:WSP) future prospects. Whispir Limited develops and provides communications management systems through cloud-based platform in the Americas, Australia, New Zealand, Singapore, Switzerland, and internationally. The AU$331m market-cap company announced a latest loss of AU$9.9m on 30 June 2020 for its most recent financial year result. As path to profitability is the topic on Whispir'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 Whispir

According to the 5 industry analysts covering Whispir, the consensus is that breakeven is near. They expect the company to post a final loss in 2022, before turning a profit of AU$1.6m in 2023. So, the company is predicted to breakeven approximately 3 years from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 64%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
earnings-per-share-growth

We're not going to go through company-specific developments for Whispir 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.

Before we wrap up, there’s one aspect worth mentioning. Whispir currently has no debt on its balance sheet, which is quite unusual for a cash-burning loss-making, growth company, which usually has a high level of debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Whispir, so if you are interested in understanding the company at a deeper level, take a look at Whispir's company page on Simply Wall St. We've also compiled a list of pertinent factors you should further research:

  1. Valuation: What is Whispir 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 Whispir 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 Whispir’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.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.