We feel now is a pretty good time to analyse Despegar.com, Corp.'s (NYSE:DESP) business as it appears the company may be on the cusp of a considerable accomplishment. Despegar.com, Corp., an online travel company, provides a range of travel and travel-related products to leisure and corporate travelers through its websites and mobile applications in Latin America and the United States. The US$854m market-cap company announced a latest loss of US$6.6m on 31 December 2023 for its most recent financial year result. The most pressing concern for investors is Despegar.com'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 Despegar.com

According to the 4 industry analysts covering Despegar.com, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$78m in 2024. The company is therefore projected to breakeven around a year from now or less! How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 35% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for Despegar.com given that this is a high-level summary, 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 issue worth mentioning. Despegar.com currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Despegar.com's case is 55%. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Despegar.com, so if you are interested in understanding the company at a deeper level, take a look at Despegar.com's company page on Simply Wall St. We've also compiled a list of important aspects you should further research:

1. Valuation: What is Despegar.com 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 Despegar.com 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 Despegar.com’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.