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When Will Upwork Inc. (NASDAQ:UPWK) Breakeven?

Austin Wood

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Upwork Inc.’s (NASDAQ:UPWK): Upwork Inc. operates an online platform that connects businesses and freelancers. With the latest financial year loss of -US$10.6m and a trailing-twelve month of -US$25.2m, the US$2.3b market-cap amplifies its loss by moving further away from its breakeven target. As path to profitability is the topic on UPWK’s investors mind, I’ve decided to gauge market sentiment. Below I will provide a high-level summary of the industry analysts’ expectations for UPWK.

See our latest analysis for Upwork

According to the 5 industry analysts covering UPWK, the consensus is breakeven is near. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$6.3m in 2021. UPWK is therefore projected to breakeven around 2 years from now. How fast will UPWK have to grow each year in order to reach the breakeven point by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 64% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

NasdaqGS:UPWK Past and Future Earnings, February 22nd 2019

Underlying developments driving UPWK’s growth isn’t the focus of this broad overview, though, bear in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing I’d like to point out is that UPWK has managed its capital prudently, with debt making up 37% of equity. This means that UPWK 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:

There are too many aspects of UPWK to cover in one brief article, but the key fundamentals for the company can all be found in one place – UPWK’s company page on Simply Wall St. I’ve also put together a list of pertinent factors you should further examine:

  1. Valuation: What is UPWK 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 UPWK 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 Upwork’s board and the CEO’s back ground.
  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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.