Loss-Making Duck Creek Technologies, Inc. (NASDAQ:DCT) Expected To Breakeven In The Medium-Term
Duck Creek Technologies, Inc. (NASDAQ:DCT) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Duck Creek Technologies, Inc. provides software-as-a-service core systems to the property and casualty insurance industry in the United States and internationally. The company’s loss has recently broadened since it announced a US$8.3m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$14m, moving it further away from breakeven. Many investors are wondering about the rate at which Duck Creek Technologies will turn a profit, with the big question being “when will the company 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 Duck Creek Technologies
Duck Creek Technologies is bordering on breakeven, according to the 10 American Software analysts. They expect the company to post a final loss in 2024, before turning a profit of US$7.3m in 2025. So, the company is predicted to breakeven approximately 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 99%, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Given this is a high-level overview, we won’t go into details of Duck Creek Technologies' upcoming projects, but, take into account that generally 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. Duck Creek Technologies currently has no debt on its balance sheet, which is rare for a loss-making growth company, which typically has high debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
Next Steps:
There are too many aspects of Duck Creek Technologies to cover in one brief article, but the key fundamentals for the company can all be found in one place – Duck Creek Technologies' company page on Simply Wall St. We've also compiled a list of essential factors you should further research:
Valuation: What is Duck Creek Technologies 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 Duck Creek Technologies 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 Duck Creek Technologies’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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