Yahoo Finance Upwork Inc. (NASDAQ:UPWK): Are Analysts Optimistic?
Upwork Inc.'s (NASDAQ:UPWK): Upwork Inc. operates an online marketplace that enables businesses (clients) to find and work with various independent professionals and agencies (freelancers). On 31 December 2019, the US$979m market-cap posted a loss of -US$16.7m for its most recent financial year. As path to profitability is the topic on UPWK’s investors mind, I’ve decided to gauge market sentiment. In this article, I will touch on the expectations for UPWK’s growth and when analysts expect the company to become profitable.
Check out our latest analysis for Upwork
According to the 8 industry analysts covering UPWK, the consensus is breakeven is near. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$13m in 2022. UPWK is therefore projected to breakeven around 2 years from today. How fast will UPWK have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 39% year-on-year, on average, 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, I won’t go into details of UPWK’s upcoming projects, but, bear in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing I’d like to point out is that UPWK has managed its capital prudently, with debt making up 7.0% of equity. This means that UPWK 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:
This article is not intended to be a comprehensive analysis on UPWK, so if you are interested in understanding the company at a deeper level, take a look at UPWK’s company page on Simply Wall St. I’ve also compiled a list of important aspects you should further examine:
Valuation: What is UPWK 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 UPWK 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 Upwork’s board and the CEO’s back ground.
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.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
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