In This Article:
VerticalScope Holdings Inc. (TSE:FORA) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. VerticalScope Holdings Inc., a technology company, operates a cloud-based digital community platform for online enthusiast communities in the United States, Canada, the United Kingdom, and internationally. On 31 December 2023, the CA$184m market-cap company posted a loss of US$5.0m for its most recent financial year. Many investors are wondering about the rate at which VerticalScope Holdings 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 VerticalScope Holdings
According to the 8 industry analysts covering VerticalScope Holdings, the consensus is that breakeven is near. They expect the company to post a final loss in 2025, before turning a profit of US$5.5m in 2026. The company is therefore projected to breakeven around 2 years from today. 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 86%, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Underlying developments driving VerticalScope Holdings' growth isn’t the focus of this broad overview, though, take into account that generally 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 issue worth mentioning. VerticalScope Holdings currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in VerticalScope Holdings' case is 72%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.
Next Steps:
There are too many aspects of VerticalScope Holdings to cover in one brief article, but the key fundamentals for the company can all be found in one place – VerticalScope Holdings' company page on Simply Wall St. We've also compiled a list of pertinent aspects you should further examine:
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Valuation: What is VerticalScope 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 VerticalScope Holdings is currently mispriced by the market.
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Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on VerticalScope Holdings’s board and the CEO’s background.
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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.