With the business potentially at an important milestone, we thought we'd take a closer look at Serko Limited's (NZSE:SKO) future prospects. Serko Limited, a Software-as-a-Service technology business, provides online travel booking software solutions and expense management services in New Zealand, Australia, North America, Europe, and internationally. The NZ$340m market-cap company announced a latest loss of NZ$16m on 31 March 2024 for its most recent financial year result. The most pressing concern for investors is Serko's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for Serko

According to the 7 industry analysts covering Serko, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2025, before generating positive profits of NZ$14m in 2026. Therefore, the company is expected to breakeven roughly 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 58% 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.

Given this is a high-level overview, we won’t go into details of Serko's upcoming projects, though, keep in mind that by and large 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. Serko currently has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which typically has high 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 too many aspects of Serko to cover in one brief article, but the key fundamentals for the company can all be found in one place – Serko's company page on Simply Wall St. We've also compiled a list of relevant aspects you should look at:

1. Valuation: What is Serko 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 Serko 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 Serko’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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.