Flywire Corporation's (NASDAQ:FLYW) Path To Profitability
We feel now is a pretty good time to analyse Flywire Corporation's (NASDAQ:FLYW) business as it appears the company may be on the cusp of a considerable accomplishment. Flywire Corporation, together with its subsidiaries, operates as a payment enablement and software company in the United States, Canada, and the United Kingdom, and internationally. The company’s loss has recently broadened since it announced a US$28m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$35m, moving it further away from breakeven. The most pressing concern for investors is Flywire'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.
Check out our latest analysis for Flywire
According to the 12 industry analysts covering Flywire, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$2.2m in 2024. Therefore, the company is expected to breakeven roughly 2 years from now. 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 84%, which is extremely buoyant. 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 Flywire given that this is a high-level summary, 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.
Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 5.6% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on Flywire, so if you are interested in understanding the company at a deeper level, take a look at Flywire's company page on Simply Wall St. We've also put together a list of key aspects you should further research:
Valuation: What is Flywire 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 Flywire is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Flywire’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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
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