With the business potentially at an important milestone, we thought we'd take a closer look at EverCommerce Inc.'s (NASDAQ:EVCM) future prospects. EverCommerce Inc., together with its subsidiaries, provides integrated software-as-a-service solutions for service-based small and medium sized businesses in the United States and internationally. On 31 December 2023, the US$1.7b market-cap company posted a loss of US$46m for its most recent financial year. As path to profitability is the topic on EverCommerce'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.

EverCommerce is bordering on breakeven, according to the 12 American Software analysts. They expect the company to post a final loss in 2025, before turning a profit of US$19m in 2026. Therefore, the company is expected to breakeven roughly 2 years 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 107% is expected, which is extremely buoyant. 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 EverCommerce's upcoming projects, however, keep in mind that typically 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 EverCommerce is its relatively high level of debt. Generally, the rule of thumb is debt shouldn't exceed 40% of your equity, which in EverCommerce's case is 65%. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

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

1. Valuation: What is EverCommerce 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 EverCommerce 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 EverCommerce'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.