Yahoo Finance When Will Darktrace plc (LON:DARK) Breakeven?
With the business potentially at an important milestone, we thought we'd take a closer look at Darktrace plc's (LON:DARK) future prospects. Darktrace plc, together with its subsidiaries, engages in the development and sale of cyber-threat defense technology solutions in the United Kingdom, the United States, Canada, Europe, and internationally. The UK£2.3b market-cap company’s loss lessened since it announced a US$150m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$95m, as it approaches breakeven. Many investors are wondering about the rate at which Darktrace will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.
Check out our latest analysis for Darktrace
According to the 8 industry analysts covering Darktrace, the consensus is that breakeven is near. They expect the company to post a final loss in 2023, before turning a profit of US$3.7m in 2024. So, the company is predicted to breakeven approximately 2 years 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 58%, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Underlying developments driving Darktrace's growth isn’t the focus of this broad overview, but, bear 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. Darktrace currently has no debt on its balance sheet, which is quite unusual for a cash-burning 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:
This article is not intended to be a comprehensive analysis on Darktrace, so if you are interested in understanding the company at a deeper level, take a look at Darktrace's company page on Simply Wall St. We've also put together a list of key factors you should further research:
Valuation: What is Darktrace 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 Darktrace 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 Darktrace’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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