When Will SmartRent, Inc. (NYSE:SMRT) Turn A Profit?
With the business potentially at an important milestone, we thought we'd take a closer look at SmartRent, Inc.'s (NYSE:SMRT) future prospects. SmartRent, Inc., an enterprise real estate technology company, provides management software and applications to rental property owners and operators, property managers, homebuilders, developers, and residents in the United States. The US$512m market-cap company announced a latest loss of US$96m on 31 December 2022 for its most recent financial year result. Many investors are wondering about the rate at which SmartRent will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.
Check out our latest analysis for SmartRent
SmartRent is bordering on breakeven, according to the 7 American Electronic analysts. They expect the company to post a final loss in 2023, before turning a profit of US$18m in 2024. The company is therefore projected to breakeven just over a year from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 102% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, we won’t go into details of SmartRent's upcoming projects, however, bear 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.
Before we wrap up, there’s one aspect worth mentioning. SmartRent 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:
This article is not intended to be a comprehensive analysis on SmartRent, so if you are interested in understanding the company at a deeper level, take a look at SmartRent's company page on Simply Wall St. We've also put together a list of essential factors you should further research:
Valuation: What is SmartRent 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 SmartRent 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 SmartRent’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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