With the business potentially at an important milestone, we thought we'd take a closer look at PCI-PAL PLC's (LON:PCIP) future prospects. PCI-PAL PLC, through its subsidiaries, provides payment card industry (PCI) compliance solutions and telephony services primarily in the United Kingdom, European Union, North America, the Asia Pacific, and the Middle East. The UK£40m market-cap company announced a latest loss of UK£2.9m on 30 June 2022 for its most recent financial year result. The most pressing concern for investors is PCI-PAL's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

See our latest analysis for PCI-PAL

According to some industry analysts covering PCI-PAL, breakeven is near. They anticipate the company to incur a final loss in 2023, before generating positive profits of UK£700k in 2024. Therefore, the company is expected to breakeven roughly 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 93%, 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.

We're not going to go through company-specific developments for PCI-PAL given that this is a high-level summary, though, 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. PCI-PAL currently has no debt on its balance sheet, which is rare for a loss-making growth company, which usually has a high level of debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of PCI-PAL 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 PCI-PAL, take a look at PCI-PAL's company page on Simply Wall St. We've also compiled a list of important factors you should further research:

1. Valuation: What is PCI-PAL 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 PCI-PAL 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 PCI-PAL’s board and the CEO’s background.

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.