With the business potentially at an important milestone, we thought we'd take a closer look at Wisr Limited's (ASX:WZR) future prospects. Wisr Limited engages in the lending business in Australia. With the latest financial year loss of AU$20m and a trailing-twelve-month loss of AU$20m, the AU$48m market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which Wisr 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.
See our latest analysis for Wisr
Expectations from some of the Australian Consumer Finance analysts is that Wisr is on the verge of breakeven. They expect the company to post a final loss in 2023, before turning a profit of AU$827k in 2024. The company is therefore projected to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 115% 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.
Underlying developments driving Wisr's 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.
One thing we would like to bring into light with Wisr is its debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk around investing in the loss-making company.
Next Steps:
There are key fundamentals of Wisr 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 Wisr, take a look at Wisr's company page on Simply Wall St. We've also put together a list of essential aspects you should further examine:
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Historical Track Record: What has Wisr's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
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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 Wisr'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.