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When Can We Expect A Profit From Smartsheet Inc. (NYSE:SMAR)?

We feel now is a pretty good time to analyse Smartsheet Inc.'s (NYSE:SMAR) business as it appears the company may be on the cusp of a considerable accomplishment. Smartsheet Inc. provides enterprise platform to plan, capture, manage, automate, and report on work for teams and organizations. The US$5.2b market-cap company announced a latest loss of US$105m on 31 January 2024 for its most recent financial year result. The most pressing concern for investors is Smartsheet'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.

Check out our latest analysis for Smartsheet

According to the 21 industry analysts covering Smartsheet, the consensus is that breakeven is near. They expect the company to post a final loss in 2026, before turning a profit of US$24m in 2027. Therefore, the company is expected to breakeven roughly 3 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2027? Working backwards from analyst estimates, it turns out that they expect the company to grow 50% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

earnings-per-share-growth
earnings-per-share-growth

Underlying developments driving Smartsheet's growth isn’t the focus of this broad overview, though, keep in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

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One thing we’d like to point out is that Smartsheet has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which usually has a high level of debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

There are key fundamentals of Smartsheet 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 Smartsheet, take a look at Smartsheet's company page on Simply Wall St. We've also compiled a list of important aspects you should look at:

  1. Valuation: What is Smartsheet 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 Smartsheet 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 Smartsheet’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.

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.