Market Sentiment Around Loss-Making Pivotree Inc. (CVE:PVT)

We feel now is a pretty good time to analyse Pivotree Inc.'s (CVE:PVT) business as it appears the company may be on the cusp of a considerable accomplishment. Pivotree Inc. designs, integrates, deploys, and manages digital platforms in commerce, data management, and supply chain for retail and branded manufacturers in Canada and internationally. On 31 December 2023, the CA$42m market-cap company posted a loss of CA$7.2m for its most recent financial year. As path to profitability is the topic on Pivotree's investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Check out our latest analysis for Pivotree

Consensus from 3 of the Canadian IT analysts is that Pivotree is on the verge of breakeven. They anticipate the company to incur a final loss in 2024, before generating positive profits of CA$4.1m in 2025. So, the company is predicted to breakeven just over a year from today. 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 130% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth

Given this is a high-level overview, we won’t go into details of Pivotree's upcoming projects, but, 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.

Before we wrap up, there’s one aspect worth mentioning. Pivotree 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 Pivotree, so if you are interested in understanding the company at a deeper level, take a look at Pivotree's company page on Simply Wall St. We've also put together a list of essential aspects you should look at:

1. Valuation: What is Pivotree 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 Pivotree 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 Pivotree’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.

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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.