When Will EverCommerce Inc. (NASDAQ:EVCM) Breakeven?

With the business potentially at an important milestone, we thought we'd take a closer look at EverCommerce Inc.'s (NASDAQ:EVCM) future prospects. EverCommerce Inc., together with its subsidiaries, provides integrated software-as-a-service solutions for service-based small and medium sized businesses in the United States and internationally. The US$1.9b market-cap company posted a loss in its most recent financial year of US$46m and a latest trailing-twelve-month loss of US$44m shrinking the gap between loss and breakeven. As path to profitability is the topic on EverCommerce's investors mind, we've decided to gauge market sentiment. 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 EverCommerce

Consensus from 11 of the American Software analysts is that EverCommerce is on the verge of breakeven. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$21m in 2025. The company is therefore projected to breakeven just over a year 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 116%, 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 EverCommerce's growth isn’t the focus of this broad overview, but, take into account 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 issue worth mentioning. EverCommerce currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in EverCommerce's case is 68%. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

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

1. Valuation: What is EverCommerce 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 EverCommerce 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 EverCommerce’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.

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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.