Yahoo Finance Market Sentiment Around Loss-Making Rent.com.au Limited (ASX:RNT)
With the business potentially at an important milestone, we thought we'd take a closer look at Rent.com.au Limited's (ASX:RNT) future prospects. Rent.com.au Limited operates a rental property website that focuses on rental property market in Australia. The AU$17m market-cap company announced a latest loss of AU$2.7m on 30 June 2022 for its most recent financial year result. The most pressing concern for investors is Rent.com.au'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.
See our latest analysis for Rent.com.au
Rent.com.au is bordering on breakeven, according to some Australian Interactive Media and Services analysts. They anticipate the company to incur a final loss in 2024, before generating positive profits of AU$3.5m in 2025. Therefore, the company is expected to breakeven roughly 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 95%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, we won’t go into details of Rent.com.au's upcoming projects, but, 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’d like to point out is that Rent.com.au 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. 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:
There are too many aspects of Rent.com.au to cover in one brief article, but the key fundamentals for the company can all be found in one place – Rent.com.au's company page on Simply Wall St. We've also put together a list of pertinent factors you should further research:
Valuation: What is Rent.com.au 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 Rent.com.au is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Rent.com.au’s board and the CEO’s background.
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.
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