Analysts Expect Breakeven For Voyager Digital Ltd. (TSE:VOYG) Before Long

We feel now is a pretty good time to analyse Voyager Digital Ltd.'s (TSE:VOYG) business as it appears the company may be on the cusp of a considerable accomplishment. Voyager Digital Ltd., through its subsidiaries, engages in the development and commercialization of a digital platform that enables users to buy and sell digital assets (cryptocurrencies) across multiple exchanges in one account primarily in the United States and Canada. With the latest financial year loss of US$10m and a trailing-twelve-month loss of US$87m, the CA$3.0b market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on Voyager Digital's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for Voyager Digital

Consensus from 7 of the Canadian IT analysts is that Voyager Digital is on the verge of breakeven. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$186m in 2022. So, the company is predicted to breakeven just over a year from now. How fast will the company 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 43% 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

Given this is a high-level overview, we won’t go into details of Voyager Digital's upcoming projects, though, keep in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one issue worth mentioning. Voyager Digital currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Voyager Digital's case is 63%. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Voyager Digital, so if you are interested in understanding the company at a deeper level, take a look at Voyager Digital's company page on Simply Wall St. We've also put together a list of pertinent aspects you should look at:

1. Valuation: What is Voyager Digital 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 Voyager Digital 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 Voyager Digital’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.

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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