We feel now is a pretty good time to analyse Paycor HCM, Inc.'s (NASDAQ:PYCR) business as it appears the company may be on the cusp of a considerable accomplishment. Paycor HCM, Inc., together with its subsidiaries, engages in the provision of human capital management (HCM) solutions for small and medium-sized businesses (SMBs) primarily in the United States. On 30 June 2024, the US$2.5b market-cap company posted a loss of US$59m for its most recent financial year. As path to profitability is the topic on Paycor HCM's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

According to the 18 industry analysts covering Paycor HCM, the consensus is that breakeven is near. They expect the company to post a final loss in 2026, before turning a profit of US$12m in 2027. The company is therefore projected to breakeven around 3 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 53%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Paycor HCM's growth isn't the focus of this broad overview, though, keep in mind 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. Paycor HCM currently has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which usually has a high level of 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:

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

1. Valuation: What is Paycor HCM 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 Paycor HCM 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 Paycor HCM'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.

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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.