We feel now is a pretty good time to analyse Fiverr International Ltd.’s (NYSE:FVRR) business as it appears the company may be on the cusp of a considerable accomplishment. Fiverr International Ltd. operates an online marketplace worldwide. On 31 December 2020, the US$7.0b market-cap company posted a loss of US$15m for its most recent financial year. Many investors are wondering about the rate at which Fiverr International 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.
Fiverr International is bordering on breakeven, according to the 8 American Online Retail analysts. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$13m in 2022. So, the company is predicted to breakeven just over a year 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 87% 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.
NYSE:FVRR Earnings Per Share Growth April 18th 2021
Underlying developments driving Fiverr International’s growth isn’t the focus of this broad overview, however, keep in mind that generally 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 Fiverr International is its debt-to-equity ratio of 103%. Typically, debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. Note that a higher debt obligation increases the risk around investing in the loss-making company.
There are key fundamentals of Fiverr International which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Fiverr International, take a look at Fiverr International’s company page on Simply Wall St. We’ve also put together a list of key factors you should further examine:
- Valuation: What is Fiverr International 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 Fiverr International 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 Fiverr International’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.
This article by Simply Wall St is general in nature. 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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