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Fiverr International Ltd. (NYSE:FVRR) Is Expected To Breakeven In The Near Future

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With the business potentially at an important milestone, we thought we'd take a closer look at Fiverr International Ltd.'s (NYSE:FVRR) future prospects. Fiverr International Ltd. operates an online marketplace worldwide. The US$8.6b market-cap company posted a loss in its most recent financial year of US$15m and a latest trailing-twelve-month loss of US$26m leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which Fiverr International 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.

Check out our latest analysis for Fiverr International

According to the 8 industry analysts covering Fiverr International, the consensus is that breakeven is near. They expect the company to post a final loss in 2022, before turning a profit of US$19m in 2023. The company is therefore projected to breakeven around 2 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 114%, which signals high confidence from analysts. 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

Given this is a high-level overview, we won’t go into details of Fiverr International's upcoming projects, but, take into account that by and large 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. Fiverr International currently has a debt-to-equity ratio of 105%. 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 in investing in the loss-making company.

Next Steps:

There are too many aspects of Fiverr International to cover in one brief article, but the key fundamentals for the company can all be found in one place – Fiverr International's company page on Simply Wall St. We've also compiled a list of important factors you should look at:

  1. Valuation: What is Fiverr International 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 Fiverr International 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 Fiverr International’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 (at) simplywallst.com.