With the business potentially at an important milestone, we thought we'd take a closer look at EML Payments Limited's (ASX:EML) future prospects. EML Payments Limited provides payment solutions platform in Australia, Europe, and North America. The AU$236m market-cap company announced a latest loss of AU$9.6m on 30 June 2024 for its most recent financial year result. The most pressing concern for investors is EML Payments' path to profitability – when will it breakeven? 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 EML Payments

Consensus from 4 of the Australian Diversified Financial analysts is that EML Payments is on the verge of breakeven. They expect the company to post a final loss in 2024, before turning a profit of AU$21m in 2025. The company is therefore projected to breakeven around a year from now or less! At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 36%, 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 EML Payments' upcoming projects, but, bear in mind 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 EML Payments is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in EML Payments' case is 54%. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on EML Payments, so if you are interested in understanding the company at a deeper level, take a look at EML Payments' company page on Simply Wall St. We've also compiled a list of pertinent factors you should further examine:

1. Historical Track Record: What has EML Payments' 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.

2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on EML Payments' 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.