With the business potentially at an important milestone, we thought we'd take a closer look at SiteMinder Limited's (ASX:SDR) future prospects. SiteMinder Limited develops, markets, and sells online guest acquisition platform and commerce solutions for accommodation providers in Australia, the Asia Pacific, Europe, the Middle East, Africa, and the Americas. On 30 June 2022, the AU$1.1b market-cap company posted a loss of AU$110m for its most recent financial year. The most pressing concern for investors is SiteMinder's 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 SiteMinder

Consensus from 12 of the Australian Software analysts is that SiteMinder is on the verge of breakeven. They expect the company to post a final loss in 2024, before turning a profit of AU$1.9m in 2025. The company is therefore projected to breakeven around 2 years from now. 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 78%, 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 SiteMinder's upcoming projects, however, 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. SiteMinder currently has no debt on its balance sheet, which is rare for a loss-making growth company, which typically has high debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

There are too many aspects of SiteMinder to cover in one brief article, but the key fundamentals for the company can all be found in one place – SiteMinder's company page on Simply Wall St. We've also put together a list of pertinent aspects you should further research:

1. Valuation: What is SiteMinder 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 SiteMinder 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 SiteMinder’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.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here