Wrkr Ltd (ASX:WRK) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. wrkr Ltd 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. With the latest financial year loss of AU$4.2m and a trailing-twelve-month loss of AU$4.4m, the AU$39m market-cap company amplified its loss by moving further away from its breakeven target. The most pressing concern for investors is Wrkr's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

View our latest analysis for Wrkr

Consensus from 2 of the Australian IT analysts is that Wrkr is on the verge of breakeven. They expect the company to post a final loss in 2024, before turning a profit of AU$400k in 2025. Therefore, the company is expected to breakeven just over a year from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 88% is expected, which is rather optimistic! 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, though, 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.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 2.8% 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:

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

1. 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.

2. 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.

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.