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Upwork Inc. (NASDAQ:UPWK) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Upwork Inc. operates an online talent marketplace that enables businesses (clients) to find and work with various independent professionals and agencies (freelancers) in the United States, India, the Philippines, and internationally. With the latest financial year loss of US$17m and a trailing-twelve-month loss of US$29m, the US$4.7b market-cap company amplified its loss by moving further away from its breakeven target. The most pressing concern for investors is Upwork's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.
According to the 5 industry analysts covering Upwork, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$12m in 2023. 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 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 65% 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.
Given this is a high-level overview, we won’t go into details of Upwork's upcoming projects, however, take into account that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 4.5% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
There are too many aspects of Upwork to cover in one brief article, but the key fundamentals for the company can all be found in one place – Upwork's company page on Simply Wall St. We've also compiled a list of relevant aspects you should look at:
Valuation: What is Upwork 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 Upwork 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 Upwork’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.
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. 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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