We feel now is a pretty good time to analyse Repay Holdings Corporation's (NASDAQ:RPAY) business as it appears the company may be on the cusp of a considerable accomplishment. Repay Holdings Corporation provides integrated payment processing solutions to industry-oriented markets. With the latest financial year loss of US$50m and a trailing-twelve-month loss of US$8.4m, the US$798m market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which Repay Holdings 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.
According to the 10 industry analysts covering Repay Holdings, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$23m in 2024. So, the company is predicted to breakeven approximately 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 25% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
We're not going to go through company-specific developments for Repay Holdings given that this is a high-level summary, though, keep in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing we would like to bring into light with Repay Holdings is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Repay Holdings' case is 48%. Note that a higher debt obligation increases the risk in investing in the loss-making company.
There are key fundamentals of Repay Holdings which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Repay Holdings, take a look at Repay Holdings' company page on Simply Wall St. We've also compiled a list of relevant factors you should further research:
Valuation: What is Repay Holdings 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 Repay Holdings 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 Repay Holdings’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.
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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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