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Rent.com.au Limited (ASX:RNT) Is Expected To Breakeven In The Near Future

·3 min read

With the business potentially at an important milestone, we thought we'd take a closer look at Rent.com.au Limited's (ASX:RNT) future prospects. Rent.com.au Limited operates a rental property website that offers services for renters and all marketers of rental properties in Australia. On 30 June 2022, the AU$15m market-cap company posted a loss of AU$2.7m for its most recent financial year. Many investors are wondering about the rate at which Rent.com.au 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 Rent.com.au

Rent.com.au is bordering on breakeven, according to some Australian Interactive Media and Services analysts. They anticipate the company to incur a final loss in 2024, before generating positive profits of AU$3.5m in 2025. Therefore, the company is expected to breakeven roughly 3 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 95%, which is rather optimistic! 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

Underlying developments driving Rent.com.au's growth isn’t the focus of this broad overview, but, keep in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we’d like to point out is that Rent.com.au has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which usually has a high level of 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 Rent.com.au to cover in one brief article, but the key fundamentals for the company can all be found in one place – Rent.com.au's company page on Simply Wall St. We've also compiled a list of pertinent aspects you should further examine:

  1. Valuation: What is Rent.com.au 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 Rent.com.au 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 Rent.com.au’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.

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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