SmartRent, Inc. (NYSE:SMRT): When Will It Breakeven?

SmartRent, Inc. (NYSE:SMRT) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. SmartRent, Inc., an enterprise software company, provides an integrated smart home operating system to residential property owners and operators, homebuilders, institutional home buyers, developers, and residents in the United States. With the latest financial year loss of US$37m and a trailing-twelve-month loss of US$57m, the US$1.5b market-cap company amplified its loss by moving further away from its breakeven target. Many investors are wondering about the rate at which SmartRent will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

View our latest analysis for SmartRent

SmartRent is bordering on breakeven, according to the 4 American Electronic analysts. They expect the company to post a final loss in 2022, before turning a profit of US$16m in 2023. Therefore, the company is expected to breakeven just over a year from today. 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 75%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth

Given this is a high-level overview, we won’t go into details of SmartRent's upcoming projects, though, 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. The company has managed its capital judiciously, with debt making up 0.8% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

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

1. Valuation: What is SmartRent 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 SmartRent 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 SmartRent’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.