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We feel now is a pretty good time to analyse Wrkr Ltd's (ASX:WRK) business as it appears the company may be on the cusp of a considerable accomplishment. Wrkr Ltd, together with its subsidiaries, provides software as a service to solve compliance needs for companies to process pay, superannuation and SMSF contributions, onboard new staff and contractors, and check credentials of new employees and contractors in Australia. The AU$81m market-cap company announced a latest loss of AU$3.8m on 30 June 2024 for its most recent financial year result. As path to profitability is the topic on Wrkr's investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
Check out our latest analysis for Wrkr
According to the 2 industry analysts covering Wrkr, the consensus is that breakeven is near. They expect the company to post a final loss in 2025, before turning a profit of AU$3.0m 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 98%, which is extremely buoyant. 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 Wrkr given that this is a high-level summary, however, keep in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 3.0% 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.
Next Steps:
There are too many aspects of Wrkr to cover in one brief article, but the key fundamentals for the company can all be found in one place – Wrkr's company page on Simply Wall St. We've also put together a list of pertinent factors you should look at:
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Valuation: What is Wrkr 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 Wrkr 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 Wrkr’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.