With the business potentially at an important milestone, we thought we'd take a closer look at VTEX's (NYSE:VTEX) future prospects. VTEX provides software-as-a-service digital commerce platform for enterprise brands and retailers. The US$1.3b market-cap company posted a loss in its most recent financial year of US$14m and a latest trailing-twelve-month loss of US$8.2m shrinking the gap between loss and breakeven. The most pressing concern for investors is VTEX's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts' expectations for the company.

Consensus from 7 of the American Interactive Media and Services analysts is that VTEX is on the verge of breakeven. They expect the company to post a final loss in 2023, before turning a profit of US$11m in 2024. So, the company is predicted to breakeven approximately 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 84%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving VTEX's growth isn't the focus of this broad overview, though, 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 aspect worth mentioning. VTEX 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:

This article is not intended to be a comprehensive analysis on VTEX, so if you are interested in understanding the company at a deeper level, take a look at VTEX's company page on Simply Wall St. We've also put together a list of relevant factors you should further research:

1. Valuation: What is VTEX 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 VTEX 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 VTEX'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.

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